Juneau, Alaska (KINY) - An increase in the bed tax could help the CBJ pay for renovations at Centennial Hall.
Mayor Beth Weldon proposed an increase in the bed-tax by 2-percent for 15 years. The current bed tax is seven percent.
"What this money would do is take a little relief off the mill rate and a little relief on the property tax," she added.
Weldon said she hopes that a two percent hike will not deter any hotel and motel business.
The revenue raised would go toward the Centennial Hall project. The proposal will go on the agenda for the CBJ Assembly regular meeting on July 22. If approved, the voters would have to approve the change at the October 1 election.
Since the ordinance is being introduced on July 22, the public testimony will take place on August 19.
Juneau citizens have raised over $6 million for the new JACC project since 2012. Over 100 people have donated at least $10,000 to the facility. Supporters said the new JACC will contribute to the quality of life and economic health of the community by creating construction-related jobs, creating exhibit and performing art jobs, and raising tax revenue while providing arts and culture events for residents and visitors.
The new JACC could generate $60 million in economic activity. Supporters claim that donors would be willing to substantially increase donations if the CBJ provided a significant grant for the project.
Finance Director Bob Bartholomew told the Assembly that the operating budget has a $3.4 million deficit for the 2020 fiscal year. He noted there is a lot of uncertainty due to the state budget situation. He told the Assembly they have to consider other capital projects that are needed that include school repairs, a new city hall, parking improvements, and a possible bid on the sub-port property. A 1-cent sales tax approved by voters would raise $1 million per year over the next four years. This revenue has not been dedicated to any project.
Centennial Hall renovations
Mayor Weldon proposed an ordinance to send a $4.5 million grant to the new JACC. Assemblyman Loren Jones amended it to $7.5 million. It would add $3 million in sales tax revenue to the grant proposal for the new JACC.
The amendment to add $3 million was approved (5-4) and the ordinance was approved (6-3). The public will be asked to approve the ordinance on October 1. The ordinance will be introduced on July 22 and a public hearing on the ordinance will be held on August 19.
Assemblywoman Michele Bonnet-Hale suggested they provide a $7.5 million grant for the new JACC. She said there is extra sales tax revenue available.
Assemblyman Wade Bryson predicted there would be more opposition for the ballot measure if the CBJ tried to allocate that much to the new JACC. "I see a losing vote and then were back to square one and we haven't accomplished anything," he added. He supported $4.5 million.
Assemblyman Rob Edwardson said he supports the $7.5 million. He said the goal is to put proposals on the agenda for July 22 to hear input and opinion from the public. "I've spoken to a lot of people related to the new JACC and they need $7.5 million. I can't put a jackhammer or axe to their proposal. They know what they need."
Assemblyman Jones said he firmly believes that 51-percent or more of Juneau voters will support the $7.5 million. "I would put my weight on the people of Juneau who I think would support a quality made building."
He said the liability of the older JACC is greater than the liability of a brand new facility. "I think the $7.5 million is a reasonable approach. Let's get to the public hearing and hear what the public has to say."
Assemblywoman Mary Becker said she supported a change in the sales tax revenue for Centennial Hall and transfer it to the new JACC. "I'm not saying we don't need to correct the JACC or make it prettier. Let's be reasonable in this time of state deficits, poor funding, and tough times for people."
Assemblywoman Alicia Hughes-Skandijs said everyone feels anxious and stress about future finances. "I do believe we have to bring our budget in line with the changes in funding we are considering."
She said she had concerns over the future of the economy and the amount of sales taxes revenues the CBJ might see. She said Juneau as a community, values the arts and how they enrich our lives.
"I really believe this will be an economic driver and keep funds in town," she added.
Assemblywoman Carol Triem said the people working on the project for years know what they need and the CBJ should give them that to develop a solid project.
Vice Mayor Maria Gladziszewski said she does not know if the CBJ has $3 million in sales taxes that are unaccounted for. She mentioned a whole host of needs including school maintenance. "Its hard in this climate to support $7.5 million. I heard from middle of the road people who told me Geez what are you guys doing? In this economy, your going to give that much money to this kind of facility."
Gladziszewski said she whole-heartedly supports the arts. She noted the group that supports the new JACC deserves a chance to make a case to Juneau voters.
"People are scared and they will have a tough time backing $7.5 million. My best guess is $4.5 million and that is what I would vote for," she added.
The CBJ will also consider an ordinance to seek $10 million in general obligation bonds for renovations at Centennial Hall and to ask the public to approve the bonds at the October election. The money would come from the motel-hotel tax and property tax.
Another proposal for $7 million for general obligation bonds was approved (7-2). Motel-bed taxes and property tax would be used to pay back these bonds. Both proposals will be introduced at the Assembly meeting July 22 and a public hearing is scheduled for August 19.