Council votes to reduce seasonal sales tax to 5 percent

By Diana Haecker
The Nome Common Council in a regular session last Monday voted on an ordinance to suspend the seasonal sales tax and keep the city’s sales tax at five percent for the months of May, June, July and August. The measure passed five to one, with the dissenting vote from Councilmember Jerald Brown.
A few years ago, voters have passed a ballot measure that raised the sales tax in the summer months to seven percent in order to capture more revenue from the seasonal influx of summer visitors and workers coming to town. However, since the onset of the pandemic, the Nome Common Council has voted to suspend the seasonal increase. City Manager Glenn Steckman said that the city would lose approximately $1.1 million in revenue if the two percent of additional sales tax were not collected. Jerald Brown argued that the idea with the sales tax increase was to capture revenue from the significant amount of people who come to Nome in the summer. “The thought was to get more money out of those folks as opposed to stick everything on citizens of Nome,” he said. He said that if the city strives to have a balanced budget, the loss of the additional sales tax revenue would mean that the property tax would need to be raised by 2.5 mill to make up the $1 million. “If we don’t have this ordinance, we could reduce the property tax by 2.5 mill. The two percent sales tax increase is not nearly as much as an impact to Nome as the 2.5 mill increase to property taxes,” he said. The counter argument was presented by Mark Johnson who said that due to increased fuel prices and other sales, the tax would bring in the needed revenue. A seven percent sales tax would be hard on folks who can’t afford to do their shopping outside of Nome. Scot Henderson said that for people the two percent sales increase makes a big difference and that people change their buying habits to get around the increased sales tax. Other arguments were that people are still reeling from the economic effects of the pandemic and a two point increase in sales tax would hurt them even more; and that businesses have a hard time switching their accounting from five to seven and back to five percent in just a few months.
In the end, the ordinance to keep the sales tax at five percent passed with Doug Johnson, Mark Johnson, Adam Martinson, Sigvanna Topkok voting yes, and Jerald Brown voting no.
In other business, the council also passed a resolution ratifying a labor agreement between the City of Nome and the City of Nome Employees’ Association, valid through December 31, 2024. Speaking for the employees’ association, Wade “Gray” Harrison said during citizen’s comments that the team worked hard on the agreement and that he was excited that the council was to approve this “historic contract.” He said the agreement addresses the challenges the city is facing and would help improve hiring and retention of city employees.
City Manager Steckman added that the agreement brings a significant raise to employees and helps employees in lower ranks to have a livable wage.
The Council passed a resolution to purchase a side-by-side for the Nome Volunteer Ambulance Department to respond to calls hard to get to by car or truck, like the beach or narrow alleyways. The vehicle would be funded by a Dept. of Health and Social Services grant. The NVAD solicited quotes from four dealers and Wilderness Skidoo offered the lowest base price at $34,511.
The Council passed a resolution to allocate $20,000 toward the hiring of a grant writer.
The Council passed two resolutions awarding contracts for road surface gravel. After a bidding process, one contract was awarded to Q Trucking to supply up to 6,000 tons of crushed aggregate road surface course to the city at the lowest bid price of $17.50 per ton, at a total cost of $105,000. The other contract went to Tumet Industries LLC to supply 5,000 tons of crushed aggregate for the port pad at $18,88 per ton, for a total of $94,250.
City Manager Steckman informed the council that the city applied for a $7 million congressional directed spending grant to be put toward the teacher and police housing project. He also talked about 3D Technology printing as a possibility to construct homes and that the state, the Denali Commission and the Pen State University are very interested in seeing if this work for Nome to solve housing problems. Nome Eskimo Community has decided not to pursue 3D House printing. No action was taken on the issue.
In other discussion, Steckman said that Mayor Handeland and he attended an Alcohol and Marijuana Control Board meeting last week in Anchorage and found out that the board will address citizens concerns on alcohol sales in Nome during their annual meeting in Nome in June. The city’s letter listing conditions for Nome Quickstop and a letter signed by 48 residents complaining about liquor store sales prompted the board to schedule a special meeting to hear citizens concerns. Before the council was a letter from AMCO informing them that Hansons seeks renewal of the liquor license. The AMCO board asked if the city has any objections in regards to the renewal. Discussion revolved around how to respond and a motion was made and passed to send a letter to AMCO that also puts conditions on the renewal, similar to the one sent when Nome Quickstop’s renewal came up.
Steckman also addressed the issue of potholes and overflowing spring melt in Nome’s roads. “The spring melt is confounding us,” he said. A number of heat traces were not working, causing ice clogs in drainage lines and little water fountains bubbling up along manholes. He said the work crew is working on it, thawing out lines and grading roads.