Finance committee backs placing a 2% seasonal sales tax on the ballot to fund utility waivers and infrastructure

The Municipality of Skagway finance committee voted to recommend that the assembly place a proposed ordinance before voters to add a 2% seasonal sales-tax increase during the summer months, with the expressed purpose of waiving certain utility fees for eligible accounts and funding critical municipal infrastructure.

Assembly member Alex (addressed in the record as "Alex") outlined the ordinance’s intent: to make water, wastewater and solid-waste services effectively free for most utility account holders by using seasonal sales-tax revenue for those funds during quarters two and three. Staff presented a revenue estimate based on 2023 sales figures: about $4,000,000 in additional revenue under the 2% scenario. Staff reported typical combined annual expenses for solid waste, water and sewer of roughly $3,000,000, leaving a modeled surplus (after funding utility waivers) of about $1.3 million available for critical infrastructure projects.

Committee members discussed eligibility rules (accounts with municipal utilities would be eligible; properties without utility service—such as some trailer parks/campgrounds—would not receive waivers unless they later connect), whether commercial users should be included, and how the waiver would appear on bills (credit versus waived fee). Heather Rodig noted accounting questions about revenue recognition and subsidy accounting. Members urged outreach and public education, proposing at least two town halls before an election vote. Committee moved and seconded the ordinance recommendation and the companion resolution establishing a utility-waiver program; both were forwarded to the assembly.

Next steps: the ordinance and accompanying resolution are available for the assembly’s first reading and placement on the Oct. 7, 2025 ballot; staff to develop public information materials and further fiscal summaries ahead of assembly consideration.