North Pole Council to Consider '15 Budget – That Doesn’t Include Sales-Tax Hike

Dec 1, 2014

The North Pole City Council tonight will consider final approval the city’s $5.7 million operating budget for the coming year.

The budget will not include an increase in sales taxes, except on alcohol and tobacco.

The council last week backed-off approving a proposal to hike the sales tax from 4 percent to 4½  percent after hearing strong public opposition in last week’s meeting. Mayor Bryce Ward proposed the sales-tax hike to deal with a looming $180,000 revenue shortfall caused mainly by the likelihood of a property tax cut for the Flint Hills-Alaska refinery.

The budget before the council tonight would increase sales taxes on alcohol, by 1 percent, and tobacco, by 2 percent. It also includes increased user fees for ambulance transports and other services.

Ward said Friday that foregoing the sales tax hike will leave the city with a $20,000 revenue shortfall. He said the city will find cuts to absorb that shortfall.

“Well, I think we can come up with those amounts, even without the half-a-percent in the sales tax,” he said.

But Ward said defeat of the sales-tax hikes means the council will not be able to trim property taxes.

“What the half-a-percent in the sales tax would have allowed us to do was to bring our mill rate down,” he said.

The mayor says he propose the sales tax hike to share the city’s burden of raising revenues with the more than 10,000 people who live outside of town but who shop there and use its services.

Tonight’s council meeting is scheduled to begin at 7 at City Hall.