Finance committee moves seasonal sales-tax plan to full assembly for public hearings

The Assembly Finance Committee on May 21 voted to introduce a seasonal sales-tax ordinance to the full assembly and to refer it back to the finance committee for further work and public comment in July.

Assemblymember Smith moved that the committee forward an ordinance for introduction on June 9 that follows the principles of a multi-member proposal (Hughes, Gandy, Smith, Steininger). The committee agreed to the motion; the chair set a timeline to return the ordinance to the finance committee on July 9 for further work and hearings with a target of final assembly action in late July.

What the proposal would do

The proponents’ packet describes a seasonal structure with lower year-round (winter) rates and higher summer rates to shift a portion of sales-tax burden from year-round residents to seasonal visitors. The group’s draft recommendation would use calendar quarters for administration, implement on January 1 in the first year, and exempt certain items — notably grocery food and utilities — from sales tax. The proposers’ modeling, as presented by Assemblymember Steininger, estimated a roughly $26 million annual shift in collections from year-round residents to summer visitors under one draft rate scenario; divided by the borough population that model produced about $800 of per-resident tax relief for the year-round population.

Competing rates and process questions

Committee members discussed several rate scenarios. The Hughes–Gandy–Smith–Steininger proposal included a winter rate of 3.5% (inclusive of the existing temporary 1%) and a summer rate of 7.5%, with the existing 1% temporary tax retained and the permanent portions restructured on a seasonal basis. Assemblymember Kelly offered alternative options intended to reduce the swing between seasons (smaller differential) while delivering similar revenue to the city. Members repeatedly asked staff to model business impacts, the number of businesses affected (for example, how many local businesses are not groceries or utilities), and the administrative feasibility of exempting utilities and food (some utility providers may not be able to distinguish residential vs. commercial account types easily).

Staff guidance and legal points

Director Flick told the committee staff could run additional models and that exemptions can be adopted by ordinance, while changes to the tax amount itself would require voter approval. The committee also noted that if the ballot question bundles exemptions and the seasonal structure, it can be presented as a single question to voters (staff said the changes are directly related and can be combined on the ballot).

Next steps

- The committee voted to forward the seasonal-sales-tax ordinance for introduction at the June 9 full assembly meeting and to refer the measure back to the finance committee on July 9 for additional work, public comment, and possible amendment prior to final assembly action.