Referendum 2A asks voters for city property tax
Steamboat Springs — The City Council hopes to convince voters to approve Referendum 2A, a 3.55-mill property tax, by promising voters much-needed capital improvements if the tax passes and threatening service cuts if it doesn’t.
This is the second time in two years the council has asked voters to approve a property tax. Last November, voters turned down a 5-mill tax that would have raised $1.9 million for the fire and ambulance department.
The tax would have increased the level of fire and ambulance services and freed up $1.3 million in the city’s general fund to spend on capital improvements.
In its second attempt, the council stayed with a similar concept, but said it learned the lessons of the failed tax and made changes. Council lowered the mill levy to 3.55, which will raise $1.3 million, and came up with a specific list of capital improvements for the freed-up money in the general fund. Among the items the city says it will pay for if the tax is approved are $250,000 for terminal improvements at Yampa Valley Regional Airport and $800,000 for improvements in Ski Time Square.
“As we all went out into the community (after the last tax), the same feeling was, yes, this was a valid tax, but the information came out too late,” Councilwoman Arianthe Stettner said.
The second time around, the mill levy has faced opposition again. Opponents say fire and ambulance are basic services and should not be funded by a special tax.
The proposed 3.55 mill tax would cost residents $28 for every $100,000 of assessed residential property and $103 for every $100,000 of assessed commercial property.
The $1.3 million raised would guarantee funding for the fire and ambulance department, Stettner said, meaning during tough budget years the fire department would not have to compete with other departments for funding.
The fire tax would allow the city to add six more firefighters and emergency medical personnel to its fire department, which will double its full-time staff. Right now, the city has just two firefighters and EMS personnel on duty per shift.
The city already is under contract with the Steamboat Springs Rural Fire Protection District to provide an additional $500,000 a year in services and capital costs. If the tax does not pass, Stettner said the city will have to decide if it should fund the $500,000 and cut city services to do so.
“We anticipated being able to do this,” Stettner said. “But, Sept. 11 changed the universe. The economy bottomed out and things looked very different, and yet we still have services we need to fund and, I think, agreements we need to honor.”
In September, the council made a list of capital improvement projects it intended to fund if the tax passes. In addition to YVRA and Ski Time Square, the list included $2.5 million over five years for money to acquire open space and parks, $500,000 for trail extensions and $375,000 for the West of Steamboat Legacy Project.
The list also included almost $1 million for improvements to the median on South Lincoln Avenue and $792,000 for what Stettner called the less glamorous project of extending the city’s street shop. Money also is dedicated to road improvements, parking lot repairs and to help leverage grants for developing park facilities.
“All of these things we enjoy. We like seeing clean sidewalks and plowed streets. We like seeing green fields,” Stettner said. “If it looks kind of unkempt, shabby and rundown, you lose pride in your community.”
Former City Council President Bill Martin spoke against the tax when the council approved it this summer.
Martin said residents should expect to have basic services, including the fire and ambulance department, covered by the general fund.
“You fund the basic services first, then the money left over is for amenities and nonprofits,” Martin said. “This fire tax is a bait-and-switch. I am insulted as a citizen that they think we are so stupid that we can’t see this is really for capital amenities and other projects.”
Instead of holding the fire tax out as a carrot, Martin said, he wants the council to be more upfront and ask voters to approve the property taxes for the amenities the tax is going to pay.
He listed Centennial Hall and Howelsen Ice Rink as recent projects that had enough public support to be funded by a property tax.
“If you need more money, let them vote on what you are going to spend it on — a general property tax. Don’t tell them it is a fire tax. That is baloney,” Martin said.
Martin would have liked to have seen a community committee such as those created after the tax for the Steamboat Springs High School failed, and a community forum to explore other tax options.
“This council did none of that,” Martin said. “They put the same tax back on.”
Business owners also have questioned the tax. The Gallagher Amendment places a heavier burden on commercial properties than residential properties with business owners paying more than three times the amount of homeowners.
In a presentation to City Council, Scott Ford said if the property tax passes, business owners would like to leverage it with capital improvements that help attract visitors to Steamboat.
Ford, who works with the Colorado Mountain College Small Business Development Center and is chairman of the Steamboat Springs Economic Development Council, pointed to Virginia Everard, owner and operator of Steamboat Kids.
Ford said any property tax increases would be passed straight on to Everard in her rent check, and the proposed tax would cost about $381 a year.
Everard would have to sell an additional $7,600 in merchandise just to stay even with last year and cover the tax. That would amount to an additional $25 per day, and Ford said 1,000 more people would have to come into her store to generate that money.
“Please understand if this property tax passes, Virginia will need something that helps attract folks to Steamboat,” he said.
During the city’s budget hearing Oct. 2, City Council President Kathy Connell said the council took a leap of faith when it decided to fund items intended to help boost the economy and the business owner. The council agreed to spend $100,000 for a summer air program and $75,000 to put toward special event planning.
“We have really done a leap of faith on council to say since the burden of the tax has gone on commercial businesses, these capital improvements need to be included to stimulate the economy,” she said.
Martin, along with some November City Council candidates, have talked about increasing the lodging tax to cover some of the costs of the city’s amenities and expenditures that bring tourists to Steamboat.
Martin said Steamboat’s lodging tax is much lower than other mountain resort communities and is almost entirely paid by tourists.
Residents have talked about trading a percentage of city sales tax, especially tax on food and medicine, for property tax. Martin said the tradeoff would not bring any more revenue, but it would diversify the city’s revenue and give the city incentive to annex areas outside the city boundary.
Connell said the council isn’t ready to go for either a reduction in sales tax for property tax or an increase in lodging tax.
“The traveling tourist is getting very suave to increase taxes and fees on vacation. We will be looking at the accommodation tax with tax policy changes in the future. But we must look at what the competition is doing,” Connell said.
As for the swap in sales tax for property tax, Connell said the council was not ready to ask voters for a change in tax policy and more research needs to be done.
“We don’t want to leap from the frying pan to the fire,” Connell said.
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Tuesday, May 11, 2021