Saturday, October 26, 2002
The ballot says Referendum 2A is a property tax to pay for fire and ambulance services in Steamboat Springs. But don't be fooled Referendum 2A is really about the city's efforts to raise revenue for capital projects. We don't begrudge the city for asking for more tax revenues. But until the city can tell us whether the proposed 5 mill property tax the most costly item facing voters on the Nov. 5 ballot is the solution to fixing its revenue woes or just the first step, the measure should not be approved.
The city of Steamboat Springs has no property tax. A 5 mill tax would raise about $1.9 million annually dedicated to funding fire and ambulance services.
That accomplishes two things.
First, the property tax would fund about $600,000 in additional equipment and personnel the city agreed to when it combined operations with the Steamboat Rural Fire Protection District in January.
Second and more importantly, the property tax would allow the city to use the $1.3 million it currently spends on fire and ambulance services elsewhere, namely on capital projects. The city has a goal of devoting 15 percent of its annual budget to capital. The $1.3 million is about 6 percent of the city's budget.
The best arguments in favor of the tax are that it allows the city to live up to the agreements it made when it combined services with the Rural Fire Protection District and that it provides a stable source of revenue for fire and ambulance services. The city said funding additional personnel would double fire department staffing and increase response times for fires and ambulances. And the increased fire department services will lead to lower insurance premiums for homeowners, which will help offset the cost of the property tax.
That property tax cost is significant. A homeowner with a $300,000 home will pay an extra $138 per year in taxes. The owner of a commercial property valued at $500,000 would pay an extra $725 per year in taxes.
The city is in a financial bind. As the economy has soured, so have sales and use tax revenues. The city projects that if its sources of tax revenue don't change, the gap between operational costs and revenues will widen to almost $10 million by 2010.
Such numbers underscore the need for the city to revisit its tax formulas. A property tax, a more stable source of revenue than a sales tax, definitely should be part of the mix. But the current proposal doesn't seem to be part of a coherent strategy.
Some on the City Council say this tax meets the city's long-term needs. Others hint there will be more tax proposals in the near future. Those who confess the proposed tax is but an incremental step cannot say what the future steps will be.
That the city pondered putting a second property tax dedicated to Howelsen Hill on the ballot before abandoning that strategy as politically untenable shows the city still has greater needs. While this council cannot bind future councils, it can work to better determine the city's long-term funding needs and develop a tax proposal to get us there. We would suggest some level of property tax combined with modest sales tax relief.
Referendum 2A is not a long-term strategy, but a short-term fix the city thinks is politically viable now. It does not merit approval.