Our view: Building credibility with voters
Allowing 0.25-cent airline tax to sunset
Recommendation to give taxpayers a break is strategic for the long haul
The news May 20 that the board of the Local Marketing District had heeded the advice of a committee of business leaders and recommended to Steamboat Springs City Council that it not seek renewal of the quarter-cent general sales tax to support commercial air service caught us with our flaps down.
The tax, approved by a large percentage of city voters in 2011 in the wake of the Great Recession, was instrumental in restoring the fiscal health of the airline program that brings many thousands of ski season visitors to our resort community, while providing options for local travelers to reach cities including Los Angeles and New York.
It had not occurred to us that Steamboat Ski and Resort Corp. and the lodging industry would be prepared to wean themselves from the sales tax revenues that have resulted in restoring reserves to almost $7 million, and in the past several seasons, gradually restoring some of the inbound seats lost during the recession.
Now that we’ve had a week to think about it, we view the decision to allow the tax to sunset as one that is fair to the taxpayers, but also strategic.
Mark Walker, chairman of the exploratory committee, told the LMD board this month the decision was all about building trust with the taxpayers.
“Some people would say ‘You have momentum, you should just continue it,’” Walker said, but, “Trust is earned, and our group felt, ‘Let’s gain some trust out there with the voters and let it sunset.’ Down the road, when we identify a need and go back to the voters, trust is built. We felt there would be value through that.”
There was no guarantee voters would have renewed the tax, and failure at the polls in 2016 might have proven very difficult to overcome in say, 2019. But in a time of plenty (reserves have been built up to $7 million) why take the chance?
LMD Board Chairman Bob Milne pointed out in a Wednesday letter that other mountain resort communities have come to admire the success of the Steamboat Springs community’s model for securing dependable airline service.
He acknowledged the collaboration of the lodging community through the 2 percent accommodation tax for the airline program, Ski Corp. through its corporate receipts, the business community through the Chamber’s Fly Steamboat contribution program, the Routt County Board of Commissioners through its substantial contributions to improvements and operations at Yampa Valley Regional Airport, the city and the broader community.
Milne also praised Ski Corp.’s management of the program, and we would single out Ski Corp.’s airline program director, Janet Fischer, for her understanding of the volatile airline industry and for the relationships she has long maintained within that industry.
“With that broad support comes responsibility,” Milne said. “The voters of our community trusted the LMD, Ski. Corp. and City Council five years ago in approving the sales tax. Therefore, we must have no less trust in asking our community and ourselves the question whether continuation of the tax is essential for the next couple years.”
The airline industry has gone through enough turbulence in the past decade that we aren’t foolish enough to predict that the current historic profitability of the airline industry will continue indefinitely. But we think, with Ski Corp.’s commitment to supply the first $1.1 million to the flight program each year, current reserves are likely not only enough to ensure flights for the 2016-17 season, but also for at least two more beyond that.
However, no one can foresee the future of the airline industry. And, if the fortunes of the airline industry take a downturn, and as a result, ups the ante for flying to small markets, resort leaders in Steamboat will have established the credibility needed to return to the voters and seek to reinstate a tax that has proven to spread benefits throughout the community.
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