Steamboat council explores 3 new taxes to meet public safety needs
STEAMBOAT SPRINGS — Steamboat Springs City Council will consider levying three new taxes — including what would be the city’s first property tax — as a way to increase the public safety budget.
City Council members gave their direction to city staff during a regular meeting May 7, after an almost yearlong initiative to address understaffed fire and emergency medical services.
The proposed taxes aim to raise about $8 million annually for public safety, which would help to add about 18 new firefighters and emergency medical responders, as well as build a new fire station downtown, according to a presentation made during last week’s meeting.
In a 5-2 vote, council members favored a 2% tax on retail marijuana and alcohol sales, as well as a 2-mill property tax. That taxing mix won out over a second option to levy a 4-mill property tax, which some members worried may be too unpopular among business owners to pass a public vote.
The initiative was originally supposed to fund only the Steamboat Springs Fire Rescue and emergency medical services, but council member Lisel Petis made a motion to broaden the funds for public safety. That would give the city more discretion about how to use the added tax revenue in the future if voters approve it.
In the past nine years, an increase in emergency calls has far outpaced staffing at Steamboat Fire Rescue. Steamboat Fire Chief Mel Stewart voiced concern in previous meetings that a lack of personnel eventually could lead to avoidable injuries or even a death.
But much remains uncertain about how much money Steamboat Fire Rescue actually needs and when. And there is also the unanswered question of where to build the new fire station, the location of which could sway the cost of construction.
Council members were therefore unsure at the meeting if an $8 million budget — a $2.6 million increase — was necessary to bring on the additional firefighters and build the fire station over the next five years.
To get more clarification, a subcommittee comprising council members Kathi Meyer and Robin Crossan will work with City Manager Gary Suiter and Stewart to analyze the budget needs over the coming years and ensure any increases in funding are commensurate with those needs.
Assuming the committee is able to finalize a budget, City Council will draft an ordinance that would likely levy the taxes on marijuana and alcohol and a property tax, according to City Council President Jason Lacy.
Kathi Meyer and Sonja Macys voted against the three proposed taxes, favoring the 4-mill option instead.
Meyer argued people who live in Steamboat throughout the year end up footing more of the bill for emergency services, much of which is paid through city sales tax, than part-time residents. The latter may stay in town for just a few weeks or months each year, which means they may not contribute as much through sales tax.
“There is a great part of our community that is not paying their fair share,” she said, referring to those part-timers.
Levying only a property tax would ensure every resident contributes to the public safety budget, regardless of how long they live here, Meyer said.
Macys also argued voters would more likely approve one tax item rather than three.
Other council members, including Heather Sloop, opposed such a high property tax. Sloop and her husband own and operate Sloop Painting, a local painting company. She worried a 4-mill tax may cripple small business owners, such as herself, and be more difficult for voters to approve.
“I think an easier pill to swallow is 2 (mills),” she said.
To put the property tax in perspective, a 2-mill levy would add about $14 in taxes per $100,000 of valuation for residents. That is based on the city’s new assessment rate of 7.15%.
Under the Gallagher Amendment, commercial properties have a 29% assessment rate. The proposed property tax would therefore levy $58 in taxes per $100,000 of assessed value for commercial properties.
The marijuana tax would only impact retail cannabis purchases. The alcohol tax would apply to all alcohol sales in city limits, including 20% of liquor sales at restaurants, according to a budget presentation from the city.
Lacy expects the first reading of an ordinance for any new taxes to come in July, in time for City Council to put any new tax proposals on the ballot for November.
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