Council puts 30-year sunset on excise tax

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— Steamboat Springs City Council has approved changes in a ballot initiative calling for an excise tax on new construction.

The excise tax would fund affordable housing efforts in Routt County.

New wording in the ballot language calls for the excise tax to "sunset," or end, in 30 years.

The Regional Affordable Living Foundation had originally asked for a

10-year sunset provision so that taxpayers would find the tax more palatable.

But Councilman Jim Engelken convinced fellow council members that a short sunset provision would make it difficult to finance land for affordable housing.

"The whole purpose is to buy land through bonds. The bonding agencies will look at that short sunset and say your buying ability is limited," Engelken said.

Council also approved a change in the tax rate for homes larger than 3,500 square feet.

RALF had originally asked for a

$3-per-square-foot tax rate. That was lowered to $2 per square foot.

RALF is a nonprofit agency dedicated to helping workers find affordable housing in Steamboat Springs and Routt County. Resort towns are notorious for their housing costs.

That's why condominium owner Joe Brennan couldn't understand why City Council would not exempt employee housing from the excise tax.

Brennan said he's provided employee housing for his Bear Claw Condominiums before affordable housing was even encouraged. Now he wants to develop a second phase that also includes employee housing.

"It's a double whammy," Brennan told City Council. Brennan felt he shouldn't be taxed for providing what is essentially affordable housing.

Councilman Engelken disagreed.

"Saying it's employee housing

doesn't mean it's affordable housing," Engelken said. He pointed out money is still made off renting the employee housing.

Engelken pointed out Steamboat is desperate for workers and that local companies have plenty of incentives to build employee housing without getting another tax break.

"If they wanted to deed restrict it (employee housing), then they are already eligible for incentives in our city code," Engelken said. Deed restricting assures the city that the housing involved would indeed be affordable to local employees.

Meanwhile, under the proposed excise tax table, single-family homes and duplexes under 1,300 square feet would not be taxed. All commercial property would be taxed at $2 per square foot. Garages, decks and caretaker units would be exempt from the tax.

The county clerk and recorder still must approve the ballot language before voters will see it on the November ballot.

If passed, the excise tax could raise up to $800,000 a year for affordable housing.

The Routt County Board of County Commissioners has also voiced support for an impact fee in the county on new construction, but want to do an impact study first.

__ To reach Frances Hohl call 871-4208 or e-mail fhohl@amigo.net

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