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Steamboat Springs — When people go to the polls to vote on the city's excise tax, they will not be deciding if they want a tax.

They will decide on the best way to tax new growth.

Regardless of whether residents vote "yes" or "no," new development will still have to pay its own way.

It is what the City Council decided a year and a half ago when it established an impact fee for all new development.

But the voters do get to decide if they want a tax based on the construction value of development or the current impact fee: those taxes on a flat rate for residential and commercial development.

It is an easy decision for Anthony Vaida, who chaired the city-appointed committee that reviewed the impact fee.

He said an excise tax follows the country's traditional tax structure by taxing more for buildings with higher value.

It has the same principles as the income and property tax.

"This is a fair, reasonable and sensible way to spread the cost of development," Vaida said. "This is the taxpayers' opportunity to help spread the cost of development."

In May, the Impact Fee Committee was asked to find an alternative to impact fees that would be fair, generate equal revenue and could be passed by the voters.

If an excise tax were approved Nov. 5, it would repeal impact fees.

If it is not passed, impact fees stay in place.

What voters will see on Nov. 5 is a proposal that would put a 1.2 percent charge on all new, residential, commercial and industrial construction, and includes remodeling and expansions of existing buildings.

Like the impact fee, the excise tax is intended to support the capital infrastructure needed by growth.

Under the current impact fee, no matter how large or expensive a single-family house is, the tax would be the same about $4,000.

But under an excise tax, homeowners with a construction value of $300,000 would pay $3,600, and a house with a $1 million construction value would pay $12,000.

Some council members have argued impact fees were designed to have people pay for the demands they place on city services and infrastructure.

But Vaida points to the U.S. tax system, where those with more wealth pay more in taxes.

"If you are fortunate enough to make more or own more, you pay more taxes. That is the basis of the American system," Vaida said.

Vaida sees the biggest impact coming from the charge on commercial property. He said under the impact fee, commercial development pays on a small-scale range based on square footage, but the fee costs between $1,200 and $1,400, well below the residential impact fee of $4,000.

An excise tax would be more in tune with the impacts commercial development has on growth and make it even with residential development, he said.

"We see that commercial properties pay significantly less under impact fees," Vaida said. "The excise tax is a much fairer way to spread the cost of growth and chooses all forms of development, (and it) doesn't just burden residential."

Like the impact fees, the proposed excise tax would have an affordable housing component.

Vaida said for those living and working in Routt County who build a house valued at $250,000 or less, the first $150,000 is exempt from the excise tax.

That value would not included the cost of the land, and the exemption would have those in moderate housing paying no more than $1,200.

"The modest housing element is better than what is in the current impact fee," Vaida said.