The Sitka assembly has approved a one-time payment of $300 to all residential utility customers, spending more than $1 million of the city’s higher-than-expected sales tax haul this past fiscal year.
The ordinance passed on a 5-2 vote on Nov. 14.
The $300 will be applied to residential accounts starting late this month, city staff said.
“Even as I was running, I had people always coming up to me, saying ‘we need help with utilities,’” Assembly Member Chris Ystad said. “That was a constant theme. And another constant theme was ‘how does tourism help me?’ I think the attempt was bringing those together.”
A record number of cruise ship visitors helped boost Sitka’s sales tax receipts. Ystad said he considered other options for helping citizens after the banner cruise season, such as taking sales tax off food, but found that to be too big of a hit to the general fund.
Assembly members said they heard from the public on both sides of the issue.
Member Tim Pike said he didn’t see this as a “gift to the community” but something to reduce utility costs which have been rising every year.
“This is about affordability,” he said. “This is the opportunity for the city to cut back on people’s costs. ... I don’t view it as a gift or a giveaway, this is pushing back on the costs that were imposed on the community through the great increases in inflation.”
The assembly had already deposited $4.5 million in excess sales tax revenue into the city’s infrastructure fund.
Member Steven Eisenbeisz said residents who don’t need the $300 can find plenty of people and organizations they can donate to.
Member Kevin Mosher said he understood the arguments from fellow assembly members and members of the public about using the funds another way, but he believes this was a good one-time payment to offset some of the things that made the community “uncomfortable” from the large number of tourists.
“It was an attempt to say thank you,” he said. “I don’t want to continue this and I will not be bringing another thing like this next year.”
Member Thor Christianson favored keeping the funds in reserves. “If this money is truly excess, it should already be in the infrastructure fund.”
He called the $1 million distribution to residents “kind of shortsighted.”
Before the vote, the assembly heard comments from the public opposing the payments. Klaudia Leccese spoke against the ordinance, commenting that the funds might be better saved for future needs. “We don’t know what’s going to happen in the future, and I think reserves are really critical,” she said.
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