Kodiak Borough Assembly eyes 3% marijuana tax for community fund

Two Kodiak Island Borough Assembly members have proposed a 3% excise tax on retail marijuana sales that would fund health, housing, and childcare programs across the borough. Assembly Members Caroline Roberts and Jeff Woods advanced the proposal after the Assembly asked Roberts in May to draft a preliminary ordinance. The Assembly reviewed that draft at a June 25 work session where no formal action was taken.

Woods said the revenue should go "strictly for public benefit, for projects, services, and grants that promote health, safety, and well-being, like education, housing stability, reentry, recovery. Childcare, and quality of life for borough residents."

Tax Structure and Timeline

State law requires voter approval for new sales taxes. The Assembly faces a July 10 packet deadline, must introduce the ordinance no later than July 16, and must adopt it by August 6 to place it on the October 6 ballot.

The draft ordinance would establish a Community Well-Being Fund to receive all marijuana excise tax revenue. The Assembly could appropriate those funds for programs, services, projects, and grants promoting health, safety, education, housing stability, recovery, reentry, childcare, and quality of life for borough residents. The draft also calls for the Assembly to review the tax and the fund no later than three years after the effective date to evaluate revenues, administrative impacts, and community benefits.

The Clerk's Office gathered comparison materials for the Assembly's review, including marijuana tax rates from other Alaska municipalities and sample ordinances from the Fairbanks North Star Borough.

Projected Revenue

City of Kodiak sales data puts taxable marijuana sales at roughly $4.5 million to $5 million annually. A 3% tax would yield an estimated $135,000 to $150,000 per year. The borough currently collects no marijuana excise tax.