Council looks for new revenue streams, facing a $2 million budget deficit
In an attempt to find new revenue streams for the City of Nome the Nome Common Council held a second work session last Monday to consider nixing the current exemption of commercial aircraft from personal property tax collection. The proposal from the city was to tax aircraft with a formula that considers the airplane’s value and the time spent on the ground in Nome. This caused an unanimous opposition from the aviation industry, from the homeported Bering Air, to Northern Air Cargo, Everts Air and Alaska Airlines. During the work session only Bering Air President Russell Rowe was present, with his father and Bering Air founder Jim Rowe testifying on the phone. Due to technical difficulties, the Zoom function didn’t work and most airline representatives couldn’t participate in the meeting.
A third work session is planned for Monday, April 1 at 5:30 p.m.
Russell Rowe summarized his company’s opposition arguing that any additional tax would be passed along to regional customers and would make travel in the region more expensive, that it would be unfairly and disproportionately affecting the aviation industry by taking a larger portion of the airline revenue as compared to other businesses in town and finally that the aircraft are not using city streets or any other city maintained infrastructure. Jim Rowe added that Bering Air’s new hangars and expansion at the airport not only improves the airport but also brings significant property taxes into city coffers. One new hangar alone, he said, accounts for $30,000 in property tax.
Passing along any additional tax to customers was the response also from NAC and Marilyn Romano with Alaska Airlines also argued that their $200,000 annual tax contribution to Nome (mostly sales tax) is notable.
Councilmember Scot Henderson said that the discussion is rooted in the attempt to spread the tax base as far and wide as possible and not saddle Nome property owners with the burden of getting more money in city coffers. What’s the projected deficit, he asked city Manager Glenn Steckman.
Two million dollars, was the answer.
“That’s a big number,” Henderson said. He reminded fellow councilmembers of how upset property owners were last year when the value of their property went up and he said, he’d be uncomfortable having to explain a tax hike to property owners. Rowe answered that he’d feel the same discomfort explaining a price increase to travelers from the 26 villages that Bering Air serves.
Rowe suggested that the city give incentives to businesses to spruce up Front Street, and was inspired by other cities who build plazas in their downtown areas to attract new businesses. The old AC building on Front Street is for sale. Why not invest in building a multi-use complex with restaurant spaces that could be rented out, with shops and entertainment?
The work session ended without any concrete proposals on the table and a third work session is planned for next week.
In the regular council meeting, the council voted on budget amendments for fiscal year 2024. Councilmember Henderson noted the sizable increase in remote sellers tax of $50,000 and the increase in the hotel tax of $45,000. Why? City Manager Steckman explained that hotels raised their rates and the increase in hotel tax is a reflection of that. On the expense side, Steckman noted that it was a cold winter and the city spent a lot on heating fuel and about $175,000 on snow removal thus far, which also includes contractor invoices from last year.
The commissioning of the new hypochloride and ozone generation systems of the Nome Pool is scheduled to take place between April 13 and 19. Bob Walker with Polar Pools in an email to the city said that the new system would be functional by the end of the week of April 20.
Steckman also reported that Wade “Gray” Harrison is resigning from the police department and will become an officer at the Fairbanks Police Department.
Regarding the progress of handing over the Nome Ambulance Department to Norton Sound Health Corporation, Steckman said that contract negotiations are three items short of being completed. The city intends to transfer the ground ambulance service to a NSHC on April 15.
Councilmember comments centered on congratulating the Nome Nanooks basketball team for winning the 3A State Championships.