Sales taxes collected by the City and Borough of Wrangell since 2006. Wrangell's rate has been set at seven percent since 1991, except for a three-year stretch in the late 1990s when food was exempted due to the economic downturn.
Sales tax returns indicate the spring and summer of 2016 to have been one of the best on record for the local economy.
From April through the end of October Wrangell collected more than $1,659,000, which is the most ever brought in during those two quarters – historically the city's busiest. When adjusted for inflation, only 2011 was a better season, but by only 0.7 percent.
The 2016 fiscal year as a whole came to a close on June 30, and returns for the year neared $2.65M. This made it second only to FY15, which brought in $2.68M in sales taxes, the crest of a rising trend since 2011.
While Alaska has no state-wide sales or income taxes, it allows municipalities to issue sales and use taxes on a wide variety of goods, rents and services. At seven percent, the City and Borough of Wrangell is tied with Kodiak for having the highest sales tax rate in the state. Proportionally it represents the largest source of revenue for the city's budget, nearly two-thirds more than property taxes for FY15, and greater than PILT, Secure Rural Schools, state revenue sharing and jail funding combined.
Sales taxes alone are an imperfect measure of the local economy, as in Wrangell sales amounts exceeding $1,500 are exempted. Small sales and services which do not exceed $200 per year in total are also exempted under Wrangell code. As such, total spending can be estimated to have been at least $23.7M, but is likely considerably greater.
Which sectors of the economy the taxes come from and how they are faring are also difficult to tell, as municipal code protects information obtained from such returns. Speaking with local merchants, food sales have remained consistent over the summer compared to previous seasons, while retail has varied between vendors.
Another area for concern has been competition from e-commerce sales, with the variety and price of goods available through online merchants like Amazon and Ebay turning more consumers toward the internet. Through the use of tax free days and a "shop local" awareness campaign, the city and Wrangell Chamber of Commerce have tried to counteract the trend.
Chamber president Christie Jamieson hypothesized the gains may be the result of a more robust advertising effort, putting Wrangell's name out at boat shows and industrial conventions. The establishment in recent years of contractors at The Marine Service Center, the addition of its larger lift, and the adding of new families to the area likely have had an impact on local sales as well.
"Our sales are pretty much on par with last year," noted Brian Ottesen, manager at Ottesen's True Value Hardware.
He pointed out that on the hardware end of things, sales for building materials have risen slightly over last year. This is consistent with an increase in building permits issued by the city, which rose by a fifth in 2015 over the previous calendar year, and has continued to climb into 2016.
The visitor industry has been enjoying successes regionally, with Southeast Conference reporting an increase in jobs by seven percent last year in September's "By the Numbers" annual report.
"We've certainly had the most visitors that we've had since 2010," said Rain Coast Data director Meilani Schijvens, who helped put together the report. Since then, the industry has grown region-wide by two- to four-percent each year, with 2016 estimates topping 1,000,000 cruise passengers for the year. Even more passengers are expected to arrive in 2017, showing the visitor industry has finally recovered from its post-recession decline.
An examination of local transient taxes in the Sentinel's November 10 issue indicated visitor numbers remained strong in Wrangell this summer, rebounding from a slight dip in 2015 from high points in 2013 and 2014.
"We had the best year ever this year," commented Jamieson, who also runs the Squawking Raven Bed and Breakfast.
"I would say the last few years have been coming back since six or seven years ago," said Eric Yancey, who operates Breakaway Adventures. He noted an increase in domestic travelers as well, and estimated 2016 will have been one of the better years for his business.
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