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Council discusses repeal of personal wealth tax exemption for aircraft

Faced with a $2 million deficit in the 2025 budget, the Nome City Council continued to debate eliminating the personal property tax exemption for commercial aircraft last Monday.

According to a memo from Bryant Hammond, the City of Nome’s special projects director, an estimated $811,843 could flow into Nome’s coffers if commercial aircraft were taxed at a rate of 11.5. Hammond’s memo also stresses that the figures are estimates based on publicly available information “which may or may not be current or accurate.”
The formula would simplify the calculation of the tax by taking into account the market value of an aircraft and the time the aircraft spends on the ground in Nome.

Because airlines had told the council in previous work sessions on the issue that they might move their fleet out of the current home base in Nome, the memo proposes a tiered approach that would provide tax relief of 20 to 50 percent depending on the tax value of the aircraft. “Implementing a tiered exemption will reduce the incentive to move aircraft between hubs outside of normal operations,” the memo says.

Council member Scot Henderson said he expected a draft ordinance to come before the council last Monday. However, City Manager Glenn Steckman explained that a draft had been prepared but did not make it into the council files.

Henderson, who is growing increasingly impatient with his council colleagues’ lack of enthusiasm for eliminating the personal property tax on aircraft, has repeatedly said it’s not fair to put the burden on owners while the city tries to balance the budget without looking at other solutions. Councilman Mark Johnson expressed unease with the memo. “We don’t know exactly what we’re looking at,” he said, adding the numbers are assumptions and may not be accurate. “We don’t know how to implement it. It’s a waste of staff time that would have been better spent analyzing the budget,” he said. Henderson disagreed, saying Johnson wasn’t looking at other options but had no problem simply raising the tax rate. Johnson countered, “You had that too,” alluding to Henderson’s yes vote on the budget that included the tax rate. But the tax rate was set in a resolution at the May 28 council meeting, which Henderson did not attend.

Mayor John Handeland intervened and asked the other council members present, Cameron Piscoya and Adam Martinson, on the phone what they would like to see.

Piscoya said he was not sure. “I would like to see what the regulation would look like,” he said.
Council members Sigvanna Tapqaq and Maggie Miller were absent.

Staff were asked to draft an ordinance to repeal this exemption and waive 50 percent of the total tax liability.
In other business, the council voted on second reading an ordinance requiring that dogs entering Nome receive a rabies vaccination in addition to the parvo vaccination. The council also voted to approve the contract between the city and the Nome Chamber of Commerce to operate the Nome Visitor Center.

NOTE: This article clarifies that Council Member Henderson was absent from the May 28 Council meeting where the Council passed a resolution setting the tax rate at 11.5.

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