Nome council tables pull-tab tax change pending legal opinion on mayor's possible conflict

The Nome Common Council voted 5-0 Monday to table an ordinance that would change how the city taxes pull-tab games until it gets a legal opinion on whether Mayor Kenny Hughes has a conflict of interest. Hughes is president of the Nome Chamber of Commerce, which uses pull-tab proceeds to fund its operations.

Council member Scot Henderson raised the question before the ordinance's first reading, saying the chamber would see a substantial increase in income if the change passes. Hughes said he isn't paid by the chamber and didn't believe he had a conflict, but that he would have to study the definition and wasn't sure who would rule on it. Council member Mark Johnson suggested getting advice from the city attorney first, and the council voted to table the ordinance. It stays tabled until the council votes to take it up again.

The ordinance, detailed in a June 8 meeting packet, would tax each pull-tab game on its "ideal net," the profit a game is designed to produce after prizes, instead of taxing gross ticket sales.

Charity representatives urged the council to act. A speaker for the Chamber of Commerce said some games are earning charities about $40 to $42 each while others are losing about $81, and that the state created charitable gaming to fund charities, not cities. Alex Thompson, president of the Bering Sea Lions Club, said that if charities stop selling pull-tabs, the city will get "zero tax revenue" from them. He said the charities' volunteers put all of the money back into the community.

Others raised the city's side of the ledger. Jeremy Jacobson, a nonresident, said the new tax would bring the city about $59,000 and asked how it would make up the roughly quarter-million dollars in revenue it would lose. Henderson has said the change would cost the city significant revenue.

Johnson said he hopes the ordinance passes and that there is still time to act before it would take effect Jan. 1. The council plans a broader workshop on city revenue at its second meeting in October.