Adding city’s 1st property tax in 4 decades among top issues at 2019 Election Forum
STEAMBOAT SPRINGS — During the second half of Thursday’s 2019 Election Forum, as candidates and local leaders answered questions on the most pressing issues facing Steamboat Springs, taxes were among the hot-button topics.
The two candidates in Steamboat Springs City Council’s only contested race for a two-year, at-large seat, incumbent Jason Lacy and challenger George Krawzoff, both voiced support for a property tax to create a more reliable stream of public funding.
Lacy, who has served as the president of City Council for the past two years, was concerned about the future of Steamboat’s budget.
“We could be having a serious crisis with sales tax being our main revenue source in the near future,” he said.
Back in the 1970s, when the city decided to get rid of its property tax, Lacy said the reason was because the majority of people doing business in Steamboat were tourists. Forty years later, that proportion has reversed.
“We are seeing locals are accounting for 60% to 70% of that tax,” Lacy said. “That’s not sustainable.”
Krawzoff was hesitant to support a property tax outright. While he acknowledged it as a possible addition to the city’s revenue, he said money needs to go to a general budget plan, not to piecemeal initiatives.
Krawzoff and Lacy also answered questions about the city’s role in making Steamboat more affordable, conflicts of interest and nightly rentals.
Debate intensified over a proposed property tax for one such initiative — funding fire and emergency services — as Kathy Connell, a real estate agent who supports the tax and a member of the citizens advisory committee formed to study the issue, squared off with former City Council member and local business owner Loui Antonucci.
If passed, the proposed two-mill levy, known as Referendum 2A, would be the first property tax for the city in 40 years. It comes as Steamboat Springs Fire Rescue, the city’s primary responder to emergency calls, struggles to keep pace with a steadily increasing demand for service.
In the past nine years, calls for service have increased by 42%, according to city data. Meanwhile, the fire department has not been able to hire any additional staff.
Connell argued the city needs a more predictable source of funding for such vital services. Currently, revenue from sales tax forms the bulk of the budget for Steamboat Fire Rescue, which is lumped in with the city’s general budget.
Connell wants to see a specific and constant revenue stream earmarked for adding staff to the department and saving for a new downtown fire station.
“Core services need to be sustainable, not related to sales tax and the ups and downs of the economy,” she said.
While Antonucci empathized with local firefighters and medics and acknowledged a need for more funding, he described his opposition to 2A as more philosophical. He argued a property tax is not the answer, because it would unduly hurt local businesses and he believes firefighting and EMS are core services that should be funded first out of general revenue.
Under the Gallagher Amendment, commercial property owners would pay about four times as much in property taxes, $58 a year per $100,000 of valuation as compared to residential homeowners, who would pay $15 per $100,000 of valuation.
Certain challenges of running a business in a ski resort town, such as the seasonality of customers and reliance on the weather to bring in visitors, already makes it difficult for people to turn profits, Antonucci argued. Adding another tax would only make it harder.
“You can only charge so much for a burger or a T-shirt,” he said.
Connell turned her focus to the large number of people who own a home in Steamboat but live most of the year elsewhere. A little over half the homes in Steamboat, 51.3%, according to the Routt County Assessor’s Office, belong to multi-homeowners who Connell argued aren’t paying “their fair share” in sales taxes for local fire and emergency services.
A two-mill property tax, in her opinion, is a humble increase for residential and commercial property owners alike. If passed, it is projected to generate about $6.8 million over the next six years. That is $1.2 million less than the Steamboat Fire Rescue requested in its 2019 strategic plan, which seeks to add 20 full-time personnel to the department by 2025.
According to Connell, such increases in staffing would allow Steamboat Fire Rescue to better respond to concurrent calls.
“Two times a week, we have third-out calls that we cannot handle,” she said, referring to when the department receives three calls for service at once.
At the end of the forum, Connell appealed to the pathos of the crowd for their support of 2A.
“I just want to tell you — if I’m the third or fourth-out call and I die because you all didn’t get to me and you went to a second homeowner, I’m going to haunt you,” she said, eliciting some laughter.
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