The Sitka assembly likely will hold off on passing any tax increases until it’s seen a draft of the 2013 budget.

In discussion at the assembly table on Tuesday night (3-6-12), members informally agreed to give municipal administrator Jim Dinley time to hammer out a budget, before floating any ideas for possible cuts.

Dinley argued that a discussion of cuts – particularly to personnel – was premature at present.

Assembly members Mike Reif and Phyllis Hackett countered that, until the public could be assured that some cuts were coming, it might be premature to pass a sales tax increase.

Hackett and Dinley had this exchange.

Hackett — You’re asking us to pass these increases, so you’ll have increased revenue to work with. And the public is not comfortable with that, and we work for the public.
Dinley – Okay. It’s the chicken and the egg. I understand what you’re saying. You’re saying the public needs to know.
Hackett – How can you help us out with that?
Dinley – Ask for patience.

Hackett said that she was a “pretty firm believer” in that for every dollar of tax increase, there should be an “equal or greater” cut.

The assembly in February passed on first reading an ordinance limiting the senior citizens’ exemption to those below a certain income. Further consideration of an ordinance raising the cap on taxable sales to $1,500 has been postponed until April.

Both proposals likely will win passage. But Mike Reif said that they will not have his vote until he’s satisfied that the administration has done what it can on the other side of the balance sheet.

“What’s happening is that we’re driving through the revenue increases, which feels very uncomfortable to me. And that’s why I’m not going to vote for final adoption. So let’s just slow down, get it right to final reading, and table them or postpone them until we have a budget. That will allow the administrator to do a thorough job, and allow us to make a rational decision. Right now, I don’t feel like it’s rational.”

Between the sunset of the Secure Rural Schools Act and decreases to state revenue sharing, Sitka is facing a $1.1-million shortfall next year. Those losses will be offset by the two proposed changes to the sales tax code – if they’re in place by July 1.

The first budget work session with the assembly is scheduled for April 26. The final municipal budget goes to the assembly for approval on May 17.