Kodiak Island Borough Assembly split on marijuana tax spending ahead of Aug. 6 vote

Kodiak Island Borough Assembly members disagreed Thursday over what a proposed 3% marijuana retail sales tax is for, one week before they vote on sending it to the October ballot.

The ordinance would deposit the revenue into a new Community Well-Being Fund. The fund would earmark the money for programs, projects and grants supporting health, education and economic development. At the work session, Assembly member Jeremiah Gardner said he could support the measure only if that fund came out.

"I can't get behind a new tax to generate more government spending," Gardner said. "If there's going to be a new tax, it needs to generate less taxes for the community, in my mind."

Gardner said the alternative he would accept is lowering the mill rate by whatever the tax collects.

A second member said the goal is more revenue from different sources and not new spending, whether that comes through a dedicated fund that reduces general fund spending or through a direct mill rate cut.

Assembly member Jeff Woods said he would support the measure on those terms. He said he dislikes earmarked taxes disappearing into the general fund.

"I personally hate when a tax on a specific item goes and gets destroyed in the amorphous black hole that is general funds," Woods said. He pointed to harbor ramp fees and a ramp he called unusable at times.

The ordinance's sponsor said she views the tax as a way to diversify borough revenue, and that the decision belongs to voters and not the Assembly.

At the Assembly's July 16 meeting, Janice Stevens, owner of Wildflower on Near Island and Smoky Hollow in Bell's Flats, testified against the draft. She said alcohol and tobacco outsell marijuana tenfold on the island. Alaska News previously reported the 4-1 vote that advanced the measure to hearing.

What happens next

The public hearing is Aug. 6 at 6:30 p.m. The Assembly will move to adopt, then move to amend by substitution to insert a definition of marijuana. Voters decide Oct. 6, with collections beginning Jan. 1, 2027.