To the editor: It is reasonable to assume taxation should be levied to support an organized government. But this segment of our business community is already taxed at a rate higher than any other. It is also a cohort that has been impacted by the COVID-19 pandemic greater than most. I understand the estimated city revenue generation from this 1% increase in the alcohol tax will be nearly $500,000 annually based on an average year’s sales of the alcohol beverage industry in the city limits. Much of this business segment has suffered revenue losses in the range of 40% in 2020 due to mandated closure and capacity restrictions, coupled with the loss of our tourism base and a respectful fear of social interaction by citizens. It is reasonable to assume that with nearly four months left, these businesses may end up down 50% or more in revenue compared to 2019.
I feel that the city of Fairbanks should look for some additional revenue streams to support the services citizens expect. This industry, at this time, would be unduly penalized when they can least afford it. The city’s restaurants and bars are already trending down 30% for the month of September. These businesses are struggling to keep the doors open and will certainly be injured by an increased tax burden. They will be forced to pass this cost on to their customers, who are already stretching their budgets as well.
While I understand the need to increase revenue stream, I suggest we look to tax other segments of the business community that may not be experiencing extreme loss. The alcohol industry, along with tobacco and marijuana, has historically been treated as a fountain of revenue that governments could access. Having a small base of users and a significant revenue stream, the general population is not bothered by it and it is perceived as a tax to offset the added expenses to society attributed to these industries.
Please reach out to your City Council and let them know this is the wrong time for this tax!