Council to explore revenue diversification during work session
STEAMBOAT SPRINGS — Steamboat Springs City Council will be taking a more indepth look at whether a property tax is the way to diversify the municipal budget and move away from its reliance on sales tax as its sole revenue source during a Jan. 12 work session.
“This issue has been on council’s radar for several years and moved up on the priority list especially as the community deals with unforeseen challenges like the past year,” said City Manager Gary Suiter in a news release. “The pandemic has shined an even brighter light on our reliance on a single revenue source and the impacts that has on providing superior services to the community.”
A variety of options have been discussed at previous meetings; however, council decided to narrow the conversation solely on property tax, which are usually less susceptible to short-term economic fluctuations than sales tax. The overall discussion will determine whether a property tax measure is the preferred method to achieve that and should be placed on an upcoming 2021 ballot.
To help frame the discussion, staff is proposing a property tax for the 2021 ballot in the amount of 5 to 7 mills. In addition, the proposal recommends avoiding a reduction in the overall sales tax rate, which would shift the tax burden away from visitors and non-city residents to exclusively city property owners.
As part of the presented scenarios, the revenue from the tax would be dedicated to central governmental services that include police, fire, public works, planning, municipal court, facilities maintenance and administrative services. In addition, considerations on other components of a proposed tax such as indefinite or sunset provision, appropriate tax rate, and possible offset scenarios, will be outlined for council.
One mill of property tax, based on current assessed valuation, generates approximately $730,000 per year, and 1% sales tax brings in approximately $7 million a year.
Tuesday’s work session will begin at 5 p.m. and property tax scenarios are the first item on the agenda.
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