Legislature(1997 - 1998)
01/22/1997 01:38 PM Senate CRA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE COMMUNITY & REGIONAL AFFAIRS COMMITTEE
January 22, 1997
1:38 p.m.
MEMBERS PRESENT
Senator Jerry Mackie, Chairman
Senator Gary Wilken, Vice Chairman
Senator Randy Phillips
Senator Lyman Hoffman
MEMBERS ABSENT
Senator Dave Donley
COMMITTEE CALENDAR
SENATE BILL NO. 10
"An Act naming Mountain View Road in Gustavus."
SB 10 MOVED OUT OF COMMITTEE
SENATE BILL NO. 23
"An Act levying and providing for the collection and administration
of excise taxes on the rental or furnishing of transient lodging,
and authorizing disposition of estimated receipts from that tax;
and providing for an effective date."
HEARD, AMENDED AND HELD
PREVIOUS SENATE COMMITTEE ACTION
SB 10 - No previous action to record.
SB 23 - No previous action to record.
WITNESS REGISTER
Senator Bert Sharp
State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Prime Sponsor of SB 23
Jack Chenoweth, Legal Counsel
Legislative Affairs Agency
130 Seward St., Suite 409
Juneau, AK 99801
POSITION STATEMENT: Explained amendment to SB 23
Bill Elander, President & CEO
Anchorage Convention & Visitors Bureau
1600 A St., #200
Anchorage, AK 99503
POSITION STATEMENT: Testified in opposition to SB 23
Brad Phillips
5019 W. 4th Ave., Suite 100
Anchorage, AK 99501
POSITION STATEMENT: Opposes SB 23
Max Lowe, General Manager
Regal Alaskan Hotel
4800 Spenard Road
Anchorage, AK 99517
POSITION STATEMENT: Opposes SB 23
Bob Southhull, General Manager
Anchorage Hilton Hotel
500 West 3rd Ave.
Anchorage, AK 99501
POSITION STATEMENT: Testified in opposition to SB 23
John Kreilkamp
3434 Wentworth
Anchorage, AK 99508
POSITION STATEMENT: Voiced opposition to SB 23
Ann Rittal
5031 W. 80th Ave.
Anchorage, AK 99502
POSITION STATEMENT: Opposes SB 23
Frank Rose, Chairman
Alaska Hotel-Motel Association
P.O. Box 72478
Fairbanks, AK 99707
POSITION STATEMENT: Testified in opposition to SB 23
Elsan Zimmerly
P.O. Box 9508
Ketchikan, AK 99901
POSITION STATEMENT: Testified in opposition to SB 23
Bob Koenitzer, Manager
Ingersoll Hotel
P.O. Box 8452
Ketchikan, AK 99901
POSITION STATEMENT: Does not support SB 23
Jolene King
Harborview B&B
P.O. Box 1305
Seward, AK 99664
Hank Newhouse
P.O. Box 9508
Ketchikan, AK 99901
POSITION STATEMENT: Opposes SB 23
Anne Hickock, Executive Director
Sitka Convention & Visitors Bureau
Box 1226
Sitka, AK 99835
POSITION STATEMENT: Testified in opposition to SB 23
Winetta Ayers, Executive Director
Kodiak Island Convention & Vistors Bureau
100 Marine Way
Kodiak, AK 99615
POSITION STATEMENT: Opposes SB 23
Kelly Lee
Raven's Nest B&B
P.O. Box 3151
Kenai, AK 99611
POSITION STATEMENT: Opposes SB 23
Alan Lemaster
P.O. Box 222
Gakona, AK 99586
POSITION STATEMENT: Suggested alternatives to SB 23
Julie Krafft
Alaska Municipal League
217 2nd St.
Juneau, AK 99801
POSITION STATEMENT: No formal position on SB 23
Bob Englebrecht, President
Alaska Visitors Association
1650 Maplesden Way
Juneau, AK 99801
POSITION STATEMENT: Testified in opposition to SB 23
Rick Barrier, President
Alaska Campground Owner's Association
4100 DeBarr Road
Anchorage, AK 99508
POSITION STATEMENT: A broad based tax would be more appropriate
Joan Budai
7722 Anne Circle
Anchorage, AK 99504
POSITION STATEMENT: Believes SB 23 is discriminatory
James Rousey
830 Jay Circle
Anchorage, AK 99504
POSITION STATEMENT: No position stated
Dennis Lavey
321 E. 5th
Anchorage, AK 99501
POSITION STATEMENT: Testified in opposition to SB 23
ACTION NARRATIVE
TAPE 97-2, SIDE A
Number 001
SB 23 EXCISE TAXES ON TRANSIENT LODGING
CHAIRMAN MACKIE called the Senate Community & Regional Affairs
Committee meeting to order at 1:38 p.m. Also in attendance were
Senator Wilken and Senator Phillips.
CHAIRMAN MACKIE brought SB 23 before the committee as the first
order of business, and noted testimony would be taken over the
teleconference network from various sites around the state, as well
as from two individuals who would be testifying from Los Angeles,
California and Seattle, Washington.
Number 060
SENATOR BERT SHARP , prime sponsor of SB 23, said introducing this
tax bill is a first for him, but it is an issue that he believes
has to put on the table for discussion.
Senator Sharp said SB 23 is a straight forward bill which would
levy a 2 percent excise tax on the amount charged for occupancy or
use in hotels, motels, rooming houses, bed and breakfasts, and
other facilities providing temporary lodging or living quarters.
These revenue dollars are intended to be use, subject to
appropriation, for Alaska tourism marketing and promotional
activities, as stated in the legislative intent in the bill.
This is an option to provide revenue from the industry to support
the marketing of Alaska in the tourism world. Presently, this
activity is primarily being paid from the general fund. This is an
option that is offered as a step toward self-pay by the third
largest business in Alaska for promotional efforts benefiting their
enterprises. This action has been recommended by previous
legislative audits, special legislative reports, other findings by
other legislative examination and testimony before finance
committees and years of industry promises. Senator Sharp added
that as of this date, he does not know of any occasion where the
industry has come forward with any specific revenue proposals to
fund tourism marketing for the state of Alaska.
Senator Sharp directed attention to an amendment which was drafted
to address some concerns that arose after the legislation was
introduced. It will remove a trailer or recreational vehicle camp
from the definition of "transient lodging", as well as clarifying
that "transient lodging" is not applicable to employees of remote
construction camp facilities and that type of facility provided by
an employer.
Number 182
JACK CHENOWETH , legal counsel and drafter of SB 23, explained that
the bill, as originally drafted, left some gray areas, and the
amendment expands the list of places or situations in which the tax
is not applicable.
In the original bill there is a reference to premises covered by
the Uniform Residential Landlord and Tenant Act, which gives the
right of occupancy of 30 or more days. It was agreed that the
reference to 30 or more days should be deleted because there are
situations that are covered by the Act that are not tied to a
minimum number of days. In other words, it takes out from under
the tax any occupancy if it is covered by the Uniform Residential
Landlord and Tenant Act.
The amendment also includes an exemption for people like the Alaska
State Troopers and others if the lodging is offered in conjunction
with educational, training, or similar services.
As stated by Senator Sharp, the amendment will also exempt those
situations where housing is provided by an employer for his
employee.
The exemption of vessels of the Alaska Marine Highway System has
been broadened to include lodging aboard all vessels.
Finally, the definition of "transient lodging" is rewritten to
exempt reference to trailers and recreational vehicle situations.
Number 217
CHAIRMAN MACKIE asked for clarification on exactly who is covered
by the tax. MR. CHENOWETH said it covers hotels, rooming or
apartment houses, lodges, motels, beds and breakfasts, and similar
facilities or similar arrangements.
Number 230
CHAIRMAN MACKIE stated he would entertain a motion to adopt the
amendment.
SENATOR PHILLIPS moved the following amendment be adopted:
Amendment No. 1
Page 2, lines 16-22: Delete all material and insert:
"Sec. 43.52.120. Tax not applicable. The provisions of
as 43.52.100 - 43.52.199 do not apply
(1) to occupancy in premises if occupancy is under
a lease or rental agreement subject to AS 34.03 (Uniform
Residential Landlord and Tenant Act);
(2) to lodging at an institution, public or
private, if incidental to provision of educational, training, or
similar services;
(3) to occupancy by an employee whose right to
occupancy is conditioned upon the occupant's employment; and
(4) to lodging aboard vessels."
Page 2, line 30, through page 3, line 4: Delete all material and
insert:
(2) "transient lodging" means a lodging or space
provided in a hotel, rooming or apartment house, lodge, motel, bed
and breakfast, or similar lodging facility or under a similar
arrangement that provides temporary lodging or living quarters."
Hearing no objection to Senator Phillips' motion, CHAIRMAN MACKIE
stated the amendment was adopted and would be incorporated into a
C&RA committee substitute
Number 260
The meeting was then opened to public testimony over the
teleconference network. Because there was a number of people
waiting to testify on SB 23, the chairman requested that the
testimony be limited to two minutes, if possible.
BILL ELANDER , President and Chief Executive Officer of the
Anchorage Convention and Visitors Bureau (ACVB), testified from Los
Angeles, California in opposition to SB 23.
Mr. Elander said the two percent tax proposed in SB 23 would add to
Anchorage's current 8 percent tax, which would place them in a less
competitive position in marketing both conventions and travel
trade. He noted ACVB dedicates more than half of its promotional
funds to convention marketing, and their success has been proven on
many occasions as based upon their fair tax level.
Mr. Elander pointed out that Alaska is at the end of the line, and
the marketing end that has to transpire to bring the convention
trade into the state is very cost sensitive, particularly in the
tax roles. Tourism marketing remains equally as difficult by
increasing these taxes.
ACVB feels that the state is infringing upon the municpality's and
the community's revenue source, for not just tourism marketing, but
tourism servicing as well. He said ACVB's budget is part of the
marketing program for the state. Their organization has been
working directly with the state and they have stretched their
resources to help the state in its fiscal responsibilities. They
feel strongly that if this bill is passed that the state is turning
against them.
In his closing comments, Mr. Elander said SB 23 is taking the tax
rate up to the point where they will begin to lose business, and
the revenue source will go into the general fund to be spent
regardless of what the legislative intent for it is. He suggested
the legislation should be withdrawn as soon as possible.
Number 322
SENATOR SHARP commented that legislative intent on other bills has
held up pretty good in the eight years he has been in the
Legislature, and he doesn't know of any money that hasn't gone to
where the legislative intent specified it should go. MR. ELANDER
responded that he thinks the industry would feel much more
comfortable if they were to sit down together with some legal
discussions on tourism taxation. He said $120 million a year is
being collected through the tourism industry that goes into local
and state government programs. That $120 million amount has gone
up $40 million over the last four years, and, yet, the tourism
marketing budget has gone down consistently. He doesn't think
there is much confidence that legislative intent will hold in this
matter because there hasn't been any recognition on what the
industry is contributing today.
Number 345
BRAD PHILLIPS , Chairman of the Tourism Marketing Council,
testifying from Seattle, Washington, said historically, the bed tax
has been a source of revenue for the local communities that has
been used directly for promoting their community and attracting
visitors.
Mr. Phillips said he served in elected office for 17 years, and he
knows that legislative intent language goes away when a bill passes
and is codified into law. There is no way that one legislature,
regardless of its intent, can tell the next legislature what to do
with the money. He suggested this problem won't be solved until we
face the issue of changing the constitution to be able to raise
funds for a purpose and to dedicate them. He said the industry has
volunteered to support broad based taxes if there is some legal
assurance that monies can be dedicated to the promotion for getting
tourists and visitors to Alaska.
Concluding, Mr. Phillips said SB 23 is another way to extract
revenues out of communities that they could use directly for the
purpose of attracting visitors.
Number 390
MAX LOWE , General Manager of the Regal Alaskan Hotel in Anchorage,
in voicing opposition to SB 23, said the increased taxation will
result in less travel to Anchorage and to Alaska. As a
destination, the state is already in a perceived cost disadvantage
to those contemplating trips to Alaska.
Mr. Lowe stated he took great exception to the sponsor's statement
that presently the marketing of Alaska in the tourism world is
primarily being paid for from the general fund. He said he doesn't
think that could be further from the truth. He thinks the state's
just over $4 million contribution to ATMC's activities pales in
comparison to the revenue that comes privately from the industry
for the marketing of Alaska.
Number 414
BOB SOUTHHULL , General Manager of the Anchorage Hilton Hotel, said
he spends a great deal of time selling the state of Alaska in
Washington, D.C. to national and regional associations. He agrees
with Mr. Elander that they need to have as many tools as possible
to win these conventions, and he strongly believes that the passage
of SB 23 will put them at a disadvantage. He suggested there needs
to be discussions on how to market the state before considering a
bill like SB 23.
Number 430
JOHN KREILKAMP of Anchorage who serves of the board of the
Anchorage Convention and Visitor's Bureau, said ACVB has a
tremendous track record of going toe to toe with some of the most
popular convention sites nationwide. This is business that
predominantly is brought in during the fall, winter and spring, and
the key to their success is the favorable tax climate. Raising the
bed tax by 2 percent only dulls their competitive edge, and in the
long run, hurts business during the time of year when it is sorely
needed. He also questioned whether these additional monies would
be reinvested to promote the state.
Number 450
ANN RITTAL , owner of the Lakeside Bed and Breakfast in Anchorage,
stated her opposition to SB 223. She said right now they are
fighting the bed and breakfast tax for small B&B's in Anchorage.
A permit is not required for operating a bed and breakfast,
although it is highly recommended, so she questions how the state
plans on gathering taxes from all beds and breakfasts when they
won't know who they are. She also questioned why cruise ships are
exempted since they are one of the largest bed providers of the
state during the tourism season.
Number 470
FRANK ROSE , Chairman of the Alaska Hotel-Motel Association,
testifying from Fairbanks, said while it may seem reasonable in an
emergency to increase a tax on outsiders, it really could be a
self-imposed disaster; the occupancy tax can cost state and local
governments more than it takes in. He said when travelers do not
visit our state and they do not pay any number of other taxes that
are assessed either directly on the traveler or indirectly on the
property, it results in reduction in revenues.
Mr. Rose said the hotel and visitor industry is not opposed to
paying its fair share, in fact, some two million hard dollars were
invested directly in the state's marketing effort by private
enterprise this past year. He said Alaska's problem is not unique,
and he suggested working together to explore the alternatives. He
declared that a tax that is imposed on one industry and does not
have some direct relation towards it use in advancing the visiting
industry is not acceptable.
Number 520
ELSAN ZIMMERLY , a bed-and-breakfast owner in Ketchikan, voiced her
opposition to SB 23. Ketchikan already has a 6 percent bed tax,
which in addition to their city tax is 11.5 percent on transient
lodging. She suggested the need to consider the question of scale
and appropriateness; for every activity there is a certain
appropriate scale, which she believes is being exceeded right now
and will be more so if the bed tax is increased. If specific
communities or municipalities need to include a lodging tax, then
she thinks it should be done at the local level instead of imposing
a statewide tax.
Concluding, Ms. Zimmerly said she sees SB 23 as a greed issue and
greed will eventually cultivate a paralysis on tourism in this
state.
Number 545
BOB KOENITZER , manger of the Ingersoll Hotel and chairman of the
Ketchikan Hotel-Motel Committee, testifying in opposition to SB 23,
echoed previous speakers' comments that higher taxes reduce
occupancy.
Mr. Koenitzer pointed out that bed taxes do not come strictly from
visitors. Ketchikan, like other cities in the state, acts as a hub
for a lot of urban communities in that area, and these people
comprise about 60 percent of his year-round business, so Alaskans
are being taxed any time the bed tax is increased.
Mr. Koenitzer believes there is a need to increase funding for
destination marketing for Alaska, but the funding vehicle has to be
spread out over the entire industry, not just the overnight
hospitality segment.
Number 560
JOLENE KING , owner of Harborview Bed and Breakfast in Seward and
vice president of the Kenai Peninsula Tourism Marketing Council,
said while many businesses benefit almost exclusively from tourism,
lodging businesses would be discriminated against by being asked to
collect this tax. Other businesses such as gift shops,
restaurants, etc., may sympathize with the lodging business, but
they will not be required to contribute anything in the way of this
new tax revenue.
Ms. King related that when the City of Seward created its bed tax,
the annual gross rate in taxable sales dropped from an 8 percent
annual increase to eight-tenths after the new tax while all other
Kenai Peninsula cities without new taxes continue to thrive.
TAPE 97-2, SIDE B
Ms. King urged the committee to vote against SB 23. She suggested
that if the goal is to balance the budget, stop spending. She also
suggested no new taxes.
Number 584
HANK NEWHOUSE , owner of Simply Solitude Enterprises testifying from
Ketchikan, explained that his business involved sailing charters,
yacht and lot management, and bed and breakfast activities. Mr.
Newhouse suggested that the future of Southeast Alaska lay partly
in diversifying the economy which could be achieved by catering to
independent travellers. He contends that the independent traveller
spends more money than tourists arriving by cruise ships. Mr.
Newhouse opposed SB 23. Ketchikan already has a five and a half
percent sales tax as well as a six percent bed tax; practically
everything a visitor does in Ketchikan from a tour to eating is
taxed. He feared that with more taxes, the independent tourism
business would be hurt in Alaska as well as the business generated
by the many Alaskan residents who utilize Ketchikan as a regional
distribution area. Mr. Newhouse reiterated the need to meet with
the tourism industry in order to discuss other manners in which to
generate money for advertising to attract tourists.
ANNE HICKOCK , Executive Director of the Sitka Convention & Visitor
Bureau, opposed SB 23. Adding the two percent tax to the current
nine percent tax charged to visitors lodging in Sitka would hamper
Sitka's marketing efforts to attract conventions and organized
visitors. Furthermore, the two percent tax would effect the local
bed tax which helps to fund the Sitka Convention & Visitors Bureau.
Ms. Hickock felt that the two percent tax was discriminatory,
short-sighted, and not broad based. This tax would fall short of
generating enough revenue to market Alaska efficiently and
effectively. Ms. Hickock echoed comments regarding the need to
meet with the tourism industry on this issue.
Number 524
WINETTA AYERS , Executive Director of the Kodiak Island Convention
& Visitors Bureau, opposed SB 23. Currently, Kodiak has a six
percent city sales tax as well as a five percent bed tax. With the
additional two percent tax, the total would be a thirteen percent
tax which Ms. Ayers felt an unreasonable amount. Recently, Kodiak
has imposed a borough wide bed tax and any additional tax would be
unreasonable. Ms. Ayers explained that cities' and borough's have
been able to utilize a bed tax in order to fund the local
destination marketing for more than 20 years. This additional tax
would hurt local efforts for destination marketing and economic
development for tourism. She indicated that the purchase of a
hotel property and building new hotel property seem to have been
effected by the possibility of the tax increase encompassed in
SB 23. Ms. Ayers encouraged the committee to work with the tourism
industry in order to determine an equitable form of funding for
tourism marketing.
KELLY LEE informed the committee that she represented Raven's Nest
Bed & Breakfast and the 32 members of the Kenai/Soldotna area Bed
& Breakfast Association as well as various hotels in the Kenai
area. Ms. Lee expressed opposition to SB 23. SB 23 has too narrow
of a focus and exempts the Alaska Marine Highway, the cruise ships
and the RV industry which are major portions of the tourism
population. Bed and breakfasts, hotels and other standard
accommodations will bear a significant burden under this tax.
Furthermore, the money from this tax are to be placed in the
general fund which means that the money is not specified for
tourism marketing. Ms. Lee suggested that an across the board tax
involving the entire visitor industry would be more amenable.
Number 375
ALAN LEMASTER , owner of Gakona Junction Village in the Copper
Valley, recognized that revenues are declining statewide. He noted
that in order for the visitor industry to grow and remain healthy,
the marketing funding provided by the state are very important.
This funding is of prime importance to the small business operator
with limited money for advertising. SB 23 appears to be
discriminatory and calls for a small, struggling portion of the
industry to carry the burden for the industry as a whole. There
are no guarantees that those paying the tax will benefit which
seems to lack fairness and equity. The language in SB 23 does not
mandate that the money collected from this tax will be allocated to
tourism marketing and promotion. Mr. Lemaster felt that the two
percent tax on top of the tax many cities, boroughs and
municipalities already collect would discourage tour operators and
individuals from coming to Alaska. Travelling to and operating in
Alaska is already expensive. Mr. Lemaster suggested that a one or
two percent sales tax on all consumers would be a more equitable
solution. Another option could be forming a task force to
determine a solution.
SENATOR RANDY PHILLIPS complimented Mr. Lemaster on his alternative
suggestions.
JULIE KRAFFT stated that she was with the Alaska Municipal League,
who had not yet taken a formal position on SB 23. Ms. Krafft
pointed out that the policy statement adopted by the Alaska
Municipal League in November of 1996 states that, "The League
opposes any action that would diminish the existing statutory
authority of local government to raise revenues through the levy of
taxes." The policy statement further says, "The League opposes the
incursion of the state into current municipal taxes such as sales
and property taxes. The League supports the states' right to enact
sales and/or property taxes in the unincorporated areas of the
state. The League also supports legislation that facilitates the
collection of sales tax on out of state purchases such as catalog
sales." Ms. Krafft noted that many municipalities have adopted
both sales and bed taxes. Ms. Krafft extended appreciation to
Senator Sharp for introducing the discussion on raising new
revenues and indicated the League's desire to work with the state
on the development of acceptable revenue options.
Number 315
BOB ENGLEBRECHT , President of the Alaska Visitors Association
(AVA), stated that the visitor industry is willing to pay its share
in taxes. A recent study by the McDowell Group found that the
visitor industry pays $124 million in taxes and fees per year. Of
that $124 million, $52 million includes taxes, fees and program
receipts to the general fund. Revenue to other state entities
totals $18 million and revenue to local governments totals about
$54 million. These taxes have doubled over the past five years.
AVA has supported taxes in the past, including the local bed taxes
for visitor promotion and increased motor fuel taxes for highway
maintenance. Mr. Englebrecht informed the committee that AVA's
Destination Alaska Plan identified sales and fuel taxes as the most
equitable manner to capture visitor spending. Mr. Englebrecht
indicated that taxing methods that effect visitor spending should
distribute the tax burden equally through all visitor types and
sectors. AVA opposed SB 23. He echoed the sentiment that SB 23 is
discriminatory, clearly taxes one segment of the visitor industry,
and would not raise enough revenue for a marketing program. Mr.
Englebrecht discussed problems regarding receipt authority. In
conclusion, he suggested a broad based approach such as a statewide
sales tax.
SENATOR RANDY PHILLIPS asked if Mr. Englebrecht was aware of the
Long Range Fiscal Planning Commission's recommendation of a $20
million tax increase on tourism. What is AVA's position on that
recommendation? BOB ENGLEBRECHT said that any increased taxes
should go to tourism related programs and projects such as ATMC.
The tourism industry is more than paying its way. Mr. Englebrecht
informed the committee that the City and Borough of Juneau had
commissioned a study which illustrated the same point as the
statewide study. In response to Senator Phillips, Mr. Englebrecht
stated that he would look into AVA's position on that
recommendation and report back to the committee.
Number 239
CHAIRMAN MACKIE requested that Mr. Englebrecht provide the
information to the committee in writing so that it could be
distributed for future meetings. Chairman Mackie inquired as to
the status of this discussion within the visitor industry regarding
how much the industry could contribute to marketing efforts. BOB
ENGLEBRECHT explained that the industry has been involved with this
issue in the past. For example, the visitor industry was involved
in a legislative task force with Senator Pearce and Representative
McLean which produced a list of alternatives for taxation. Mr.
Englebrecht noted that the problem with this issue seems to be that
some group tends to be omitted. This problem lead Destination
Alaska to identify a statewide sales tax as an option since it is
broad based. Mr. Englebrecht said that AVA was willing to work
with the legislature and the administration on this issue.
RICK BARRIER , President of the Alaska Campground Owner's
Association and owner of Gold Nugget Campground Park in Anchorage,
appreciated the committee's amendment eliminating the campground
industry. Mr. Barrier acknowledged that campgrounds are a member
of AVA and agreed that there are better ways to generate general
fund revenues for the state. Marketing the state as a destination
does benefit other sectors besides tourism. Mr. Barrier agreed
with previous statements that a more broad based tax would be
appropriate.
Number 165
JOAN BUDAI , bed-and-breakfast owner in Anchorage, explained that
she does not have repeat visitors; most have saved all there life
to come to Alaska. Ms. Budai wanted to keep her prices down for
these people which would require that she absorb the cost of this
tax if passed. With this new tax, many of the smaller operators
would be put out of business. Ms. Budai was offended by Senator
Sharp's statement that this tax could generate funds to meet the
$66 million of new revenues in the 1998 fiscal year budget plan.
Why are new revenues in the budget? Why is the budget not being
reduced to recapture that money instead of initiating new taxes?
Ms. Budai reiterated the sentiment that SB 23 is discriminatory.
She reminded the committee of previous communities' efforts to tax
tourism and the negative effects that resulted.
JAMES ROUSEY , testifying from Anchorage, said that others had
answered his questions and comments and yielded his time to the
next witness.
DENNIS LAVEY , owner of the Day's Inn in Anchorage, opposed SB 23.
Over 60 percent of Mr. Lavey's total revenue is generated from in-
state residents illustrating that the tax increase would effect
Alaskan residents. Mr. Lavey informed the committee of a study
that concluded that room/occupancy taxes fall disproportionately on
smaller properties and higher mill rates. Increased taxes does not
bring in more business.
CHAIRMAN MACKIE thanked everyone for there testimony. He announced
that SB 23 would remain in committee.
SB 10 MOUNTAIN VIEW ROAD - GUSTAVUS
CHAIRMAN MACKIE introduced SB 10 as the next order of business
before the committee. He explained that this bill had been heard
in the past and did not make it through the shuffle at the last
minute in the Senate.
SENATOR WILKEN moved to pass SB 10 out of committee with individual
recommendations. Without objection, it was so ordered.
There being no further business before the committee, the meeting
was adjourned at 3:00 p.m.
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