Council to discuss tax language |

Council to discuss tax language

Voters will make final decision in November election

Avi Salzman

— In principle, the Steamboat Springs City Council has agreed to place an early child education tax and a transportation tax on the ballot in November. Tonight, they will decide by reading the tax proposal language into ballot form who will pay, how much they will be shelling out and who will decide how the money is spent.

The Chamber Resort Association-sponsored transportation tax, dedicated primarily to an airline guarantee program, needed just a few adjustments before it was finalized for tonight’s meeting.

Voters will likely see a tax that gives 20 percent of its proceeds to the city’s free bus system, which is an increase from the group’s original proposal of 17.5 percent. That amount would bring in at least $500,000 next year, based on the proposal, even if $500,000 is more than 20 percent of the tax proceeds.

The transportation tax may or may not have a sunset provision, which would say when the tax would be phased out, depending on the results of a telephone survey the group conducted over the past month.

Sandy Evans-Hall, the chamber’s executive vice president, said Monday she did not know the results of the survey yet.

Some City Council members and community members had urged the transportation group to add the sunset, though the group was worried a sunset could hurt its chances at establishing long-term contracts with airlines. Even without a sunset provision, however, the City Council can always repeal the tax if circumstances change.

The airline guarantee program puts money up to make sure airlines will have guaranteed funds and will be willing to take the financial risk of flying into the Yampa Valley in the winter. Business people throughout the city have said the program is essential to maintaining levels of tourism in the city.

The tax would be collected on items and services used primarily by tourists a 3-percent lift ticket tax, a 2-percent tax on tourism activities, lodging and equipment rentals and a 1-percent restaurant tax to raise a total of about $2.9 million. Neither retail nor grocery items would be taxed in the proposal, a big selling point for the council.

In the new version, all U.S., state and city activities will be exempt from the tax, meaning skiers at Howelsen Hill will not pay a lift-ticket tax, nor will skaters at Howelsen Ice Arena pay an activity tax.

“The intent we’re trying to follow is that the majority of the tax be paid by visitors, so we tried to rule out anything locals used heavily,” Evans-Hall said.

The half-cent early childhood education tax may be a little more complicated for the City Council, which must decide whether it will link the city sales tax to a county property tax expected to be passed today for the same purpose. The county, as well as the First Impressions board, does not want the success of the tax proposals to hinge on both proposals passing in November.

City Council members, including Council President Pro Tem Kathy Connell, have supported the idea of linking the tax, in part to make sure voters do not pick the sales tax over the countywide property tax for fear of “double-dipping.” Connell has been adamant about the idea that the tax, which looks to benefit residents throughout the county, be paid for by residents throughout the county.

The county’s property tax will likely be 1 mill and the city’s sales tax would add a half-cent to the 8.4 cents residents currently pay on a dollar worth of purchases in the city limits. Groceries and utilities may be excluded from the sales tax.

The county tax could bring in about $600,000 and the city tax could net up to about $1.6 million, according to First Impressions. Both taxes would sunset in four years.

Revenues from the tax would primarily go toward paying for scholarships for families who could not afford child care, with child-care providers presumably raising their rates. Providers claim current rates, which are between $28 and $32 in the valley, do not allow them to pay their employees enough money.

Renee Donahue, the community liaison for First Impressions, said the board of First Impressions still favors the taxes being presented as stand-alone proposals.

“I hope it’s not going to be linked,” she said.

To reach Avi Salzman call 871-4203

or e-mail

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