Steamboat Springs On Tuesday, Steamboat Springs City Council could take the next step toward asking its voters to approve an excise tax on new construction. The proceeds of the tax, up to $1.023 million annually, would be dedicated to providing affordable housing in the community.
Council will conduct the first reading of an enabling ordinance Tuesday night during the consent portion of its regular meeting agenda. The ordinance is necessary to put the question on the Nov. 7 ballot.
Shall the city of Steamboat Springs taxes be increased by up to $1,023,455 annually in order to provide financial resources for affordable housing by: 1. Permitting the city council to establish, and, from time to time, change, the procedures by which and the times at which development excise taxes are assessed and collected. 2. Establishing the excise tax to be initially as follows: A. On buildings with no more than three residential dwelling units, the excise tax shall be assessed as follows: Square footage Tax per square foot 0-1,300 0 1,301-2,000 $1 2,001-3,500 $2 3,501-plus $3 ExampleS: 1,400 s.f. house Total tax: $1,400 2,500 s.f. house Total tax: $5,000 B. On all other buildings, both residential buildings containing more than three dwelling units and on nonresidential buildings, the tax per square foot shall be $2. 3. Permitting the city council to increase the aggregate development excise tax from time to time in an amount no greater than the cumulative increase in the consumer price index (all items) for the Denver metropolitan area. And in connection therewith, Shall the full proceeds of such taxes at such rates and any earnings therefrom be collected and spent without limitation or condition, and without limiting the collection or spending of any other revenues or funds by the city of Steamboat Springs, under Article X, Section 20 of the Colorado constitution or any other law? Yes No
The tax, as it is being proposed, would be collected on a per-square-foot basis and go into effect on Jan. 1, 2001.
Because the excise tax is an issue under the Taxpayers Bill of Rights, it must go to the voters, city attorney Tony Lettunich said.
Because it is on the consent agenda, the ordinance could pass first reading without discussion. However, it still must go through a public hearing on second reading before it can be adopted. And any council member has the right to call the matter up for discussion.
City Councilman Paul Strong said Friday he would support the ordinance to place the question on the fall ballot.
"It's definitely a need in the community," Strong said. "It's right that the citizens vote on it."
Strong said he is aware that some of his constituents are opposed to subsidizing housing for others. He said he also knows that the tax would increase the cost of housing. It's fair to point out, Strong said, that the excise tax would not tax many people who already own homes here (until they build a new home), and would tax new arrivals.
But Strong feels that, compared to the typical local building cost of $150 per square foot, a $2 tax per square foot (for a mid-size house), when you add in the cost of a lot, is a small fraction of the overall cost of building.
"It's a pretty small component," Strong said. "It's less than 1 percent by far."
City Council is already planning to discuss the excise tax during a Tuesday night work session with the Routt County Board of Commissioners. That meeting is scheduled to begin at 6 p.m., immediately following the consent portion of the agenda.
The idea for the tax came from the board of the Regional Affordable Living Foundation. RALF is also asking the county commissioners to impose an "impact fee" that would generate revenues roughly equivalent to what would be generated by the city's excise tax.
Rob Dick, executive director of RALF, said the county cannot impose an excise tax by law. But he believes the tax needs to be balanced out in the county so as not to provide a disincentive for construction in the city and an incentive to move out into the county.
County Commissioner Nancy Stahoviak has said she understands Dick's rationale. She does not envision that the county would put an impact fee into place until after the city has passed and established in excise tax, though.
A county impact fee would not require an election.
Making sure that the tax can support bonded indebtedness in the future was among the key issues that was considered in drafting the language of the ordinance and the ballot question, Lettunich told City Council.
"The legal department is working with bond counsel and the attorney for RALF to develop this ordinance and ballot question to assure that we have done everything possible to adopt an excise tax that is legally appropriate and that can support the issuance and repayment of bonded indebtedness if the community desires to incur such indebtedness in the future," Lettunich said.
The tax, as proposed, would tax people differently based upon the size of the home they are building. That plan is addressed in a series of six findings City Council would make if it approves the ordinance. One of the findings seeks to justify the sliding scale of the tax.
"The City Council believes that as the size of a residential dwelling unit increases, there is a corresponding increase in demand on the community for employees to service the demands for services and goods created by such residential development," the ordinance reads.
The other findings include:
n City Council is greatly concerned about the adverse impact on the public health, welfare, peace, and safety in the community created by dramatic increases in the cost of housing for its citizens.
n City Council believes that the affordable housing crisis in Steamboat Springs is exacerbated by the continued level of development, both residential and nonresidential.
n City Council believes that providing for affordable housing is a legitimate government purpose.
n City Council considers that it is in the best interest of the public health, safety and general welfare of the citizens of the city of Steamboat Springs to create an excise tax on new development so that development helps pay for the impact that it creates.
To reach Tom Ross call 871-4210, or e-mail firstname.lastname@example.org