Kodiak City Manager Aimee Kniaziowski repeated a few times at Tuesday night’s city council work session that the city is not in a crisis or emergency regarding its finances, but nevertheless warned that the city’s general fund continues to be drawn down annually, and could disappear if that trend continues.
She said it’s just being responsible to discuss a small tax increase.
The City of Kodiak sales tax is currently 6-percent, a level it’s been at since 1993 – just about 20 years. The city’s small property tax is just 2-mils, and generally goes to the borough to help fund schools.
The city will consider a 1 percentage point increase in the sales tax Thursday night at its regular meeting, when a code change ordinance will be introduced.
Another part of the proposed ordinance would raise the sales tax cap from $750 to $3,500, meaning the most one can pay on any one large purchase would increase from $45 to $245.
That change and going to a 7-percent sales tax would generate $3.1-million in additional revenue per year.