Assembly discusses reallocating bed-tax revenue toward housing and infrastructure
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Summary
An assembly member proposed amending borough code to allow a portion of bed-tax/tourism sales-tax proceeds to fund infrastructure and housing development; members debated preserving Discover Kodiak funding versus dedicating revenue to a housing trust or a new bed-tax.
An assembly member introduced a discussion to amend Kodiak Island Borough code to permit some portion of bed-tax or tourism sales-tax proceeds—money currently dedicated to tourism development and Discover Kodiak—to be redirected toward infrastructure that supports housing development, such as lot surveying, utility extensions and predevelopment investments.
Melissa Schonwether (Kodiak Economic Development Corporation) and assembly members described the housing action plan developed this year and urged coordination to turn planning into implementable projects. One assembly member proposed dedicating up to 50% of the bed tax to a housing development fund and introduced the idea of an additional 5% short-term-rental bed tax dedicated to housing. Opponents warned that the tourism fund previously served as a financial cushion for the borough (funding a touch tank receptionist and supporting Discover Kodiak during downturns), and cautioned that earmarked funds can be absorbed over time unless carefully protected.
Madam Manager noted the fund supports community assets and recommended ensuring any reallocation preserves key tourism functions or compensates them elsewhere. Assembly members suggested involving Discover Kodiak staff and the housing steering committee in future work sessions to craft specific language and guardrails for any reallocation or new housing trust fund.
