Steamboat to see rising sales tax collections, but city staff says more money still needed
Though the city of Steamboat Springs saw a slight decline in 2020 sales tax revenue as COVID-19 hit Routt County, the city is expected to catch up to its 2019 revenues.
Still, City Finance Director Kim Weber said the costs of labor and supplies has required the city to make cuts in services.
Weber said $4 million is expected to flow into the city’s coffers through the end of the year.
“Staff have done a great job of trying to mask the cuts and trying to not touch politically sensitive topics or things that are very apparent to all of the city,” Weber said. “But it’s going to get more apparent the longer this goes on.”
Weber said most cuts came from staff trainings and uniforms, highway medians, flower barrels and lights, which are subtle but still noticeable to residents and visitors.
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Steamboat currently relies almost entirely on sales tax, which the city maintains due to its high levels of tourism, but Steamboat City Manager Gary Suiter said sales tax is difficult to predict and is too dependent on external factors.
In an effort to diversify the city’s general fund, Suiter and Weber proposed implementing a 2 mill property tax, which City Council members originally supported but ultimately shot down July 7, after several community members spoke out against the tax and none spoke out in favor of it.
All seven council members voted against the property tax, and many said they were concerned about the impact it would have on Steamboat’s affordable housing crisis, but Suiter said 2 mills would not make much of a difference, and a lack of supply, as well as the influx of wealthy people purchasing second homes, is a larger driving force behind the crisis.
“When you have lack of supply, and you have people that have disposable income that can pay that extra and out bid the next person, it makes it hard,” Suiter said. “I don’t think its property taxes that make homes unaffordable.”
Suiter also said it is common for resort communities to have negative feelings about tourists, but Steamboat residents cannot have fewer tourists while still relying on sales tax and expecting high levels of city service.
“There are now some folks that want to slow down the tourism and the marketing, and that’s fine, but now you’re going to have to levy some other taxes to pay for these services because tourists are footing 35% to 40% of the bill,” Suiter said. “You can’t have everything you want.”
In an attempt to help ease Steamboat’s housing crisis, the Yampa Valley Housing Authority made an offer last week on the vast expanse of land owned by Steamboat 700 on the city’s west side. That land would ultimately need to be annexed into city limits.
While Suiter and Weber said the development is helpful for affordable housing, more units requiring city services without paying a property tax could further drain staff resources.
“How do you take on that size of a development with the same level of revenue that the city has and you have all these additional services you’re providing to a new area?” Weber said.
To reach Alison Berg, call 970-871-4229 or email aberg@SteamboatPilot.com.
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