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Letter to the Editor

Chamber opposes tax hike

To the editor: The Greater Fairbanks Chamber of Commerce urges the Fairbanks City Council to vote against Ordinance 6084, which outlines a plan to increase the hotel/motel tax rates and the city’s take for the general fund.

As a voice for the business community in Fairbanks, we oppose any tax that specifically targets a single industry for the purposes of funding general government services.

The state of Alaska and local governments have a track record of targeting the easiest industry when they have a budget shortfall or a perceived budget shortfall. This creates an inequitable scenario among industries when one industry is targeted to fund government’s general services.

If there is a demonstrable need for increased funding for general government services, then a broad-based tax imposed equitably on all visitors, residents and industry sectors should be the type of tax considered.

It’s important to remember that visitors have choices when they plan a vacation. It’s important to remember that, like many other industries, Fairbanks is competing in a global market. As a long-haul travel destination, Fairbanks is a high-cost journey for many visitors. Increasing that cost will depress future tourism and all of the financial benefits it brings to our community. It can be tempting to see outsiders as a source of revenue, but Fairbanks should avoid this temptation.

The hotel/motel tax was initially self-imposed by industry with the clear intent to reinvest those dollars into economic development and destination marketing that would further enhance the industry and our community.

Tourism and the industry as a whole are already paying an equitable (and some would argue more than equitable) portion of the local tax base. Twenty percent of the borough’s top 50 property tax payers are hotels, and 22.5% of the revenue collected through the hotel/motel tax goes directly to the city’s general fund. 2018 marked the fourth consecutive year of record-breaking hotel/motel tax collections. Continued growth in tourism will lead to continued growth in the size of this contribution.

Our government should maintain tax policy that supports economic development and communicates that Alaska is open for business. It is essential for the future of our people and our state.

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