City Council tables 2A tax repurposing initiative but votes to pursue property tax
In a 5-2 vote Tuesday, Steamboat Springs City Council decided Tuesday to move forward with a 2-mill property tax for parks and recreation, with council members Lisel Petis and Heather Sloop voting against the measure. Council also voted unanimously to end current discussions on the reallocation of the 1% accommodations tax with a majority of the revenue earmarked for destination marketing and management.
Property tax discussion
City staff proposed a property tax about six months ago as a way to offset the city’s heavy reliance on sales tax, which city leaders say is unreliable and dependent on too many external factors.
Council members have gone back and forth about where the money should go if voters approve the tax, but they decided months ago to earmark the revenue for parks and recreation.
During Tuesday’s discussion, council members Michael Buccino and Sonja Macys said they believed the city should have a dedicated funding source for its parks and open spaces because they are an important aspect of life in Steamboat for both locals and visitors.
“We are one of a precious few cities that doesn’t have any dedicated funding for parks and recreation,” said Macys, who has a master’s degree in parks management. “I think this opens us up to what we could be and not just what we are.”
Petis, who originally supported the measure but spoke against it for the first time Tuesday, said she did so because she was concerned about Steamboat’s affordable housing crisis.
“To me, the perception is reality, and the perception is that we have a ton of money right now,” Petis said. “(A property tax) is going to impact affordable housing and increase the cost of housing.”
Sloop, who has not supported the idea since council began discussing it in November, said while she understands the need for more funding, she felt COVID-19 put too heavy a strain on residents, and she did not want to add to their burdens by trying to get a property tax passed.
“I will continue to say that I believe in a future property tax, but I do not believe at this time that it will gain and garner the support that it needs to pass,” Sloop said.
The city has generated more revenue in sales tax in 2021 than it did in 2020, and it will also be receiving grant money from the state and federal governments. Bill Jameson, a resident who spoke during the public comment portion of the council meeting, said he believes the city is in a stable financial spot and should not be trying to collect more money from residents.
“To say you’re not flushed with cash is a bit hard to believe,” Jameson said. “The feds are pumping money, the state is pumping money, and you’re going to go to the voters and ask for a 2-mil property tax?”
In response, council member Robin Crossan emphasized the federal and state money is only coming because of COVID-19 and will not be a recurring source of revenue.
“When it’s gone, it’s gone, and it’s not something we can count on year in and year out,” Crossan said.
Crossan also said if the city has to implement restrictions due to COVID-19 again, she is concerned about drops in funding with less visitors coming to town.
“God forbid we don’t have a ski season next year,” she said. “There’s never going to be a good time for anything that we do.”
Council will vote on a second reading of the property tax ordinance July 6. If the second reading passes, voters will have the ultimate say on the tax in November.
Accommodations tax reallocation
The accommodations tax, which the lodging industry pays, was originally passed in 1986 to fund “development of improvements and amenities in Steamboat Springs, which will promote tourism and enhance the vitality of Steamboat Springs as a premiere destination resort.” And then in 2013, voters approved a 10-year reallocation of the funds, also referred to as 2A funds, to build trails around town and help finance improvements along Yampa Street.
Kara Stoller, CEO of the Steamboat Springs Chamber, came to council in March and proposed repurposing the funds to support destination marketing, maintenance and management. Under the proposal, council would decide each year how much money goes to marketing and how much to maintenance and management. As for what maintenance and management look like, Stoller said they could include leave-no-trace campaigns, river rangers and signage informing visitors about how to take care of public lands.
After months of discussion between council and the Chamber, Stoller told council Tuesday that the chamber would be pulling its support for both the property tax and the proposal to reallocate 2A funds.
“Time will allow the city and the Chamber to work together with other community members and land managers to clarify what destination management entails, who the participating entities will be and the resources needed to achieve shared goals,” Stoller said. “We acknowledge that these funding strategies need more time and public input.”
Council President Jason Lacy said while he thinks council should bring the idea back up before 2023, he felt community members saw the measure as supporting more marketing, rather than mitigating the impacts of tourism.
“I think there’s a lot of confusion around what destination management really means,” Lacy said. “In a year like this one, people are feeling the pain of and the impacts from tourism, and they can’t imagine having tons more marketing dollars right now.”
All seven council members voted to discontinue discussions on the Chamber proposal, but they indicated they wanted to bring the item back up for consideration in 2022.
To reach Alison Berg, call 970-871-4229 or email aberg@SteamboatPilot.com.
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