Wednesday, September 4, 2002
Steamboat Springs In November, voters will decide if they want an excise tax to replace impact fees.
On Tuesday night, the City Council voted 6-0 to include the question on the Nov. 5 ballot.
The excise tax would be a 1.2 percent levy on all new residential, commercial and industrial construction and includes remodeling and expansions of existing buildings. Under the proposal, the city would tax based on construction valuation and collect the tax when the building permit is issued.
Deputy City Manager Wendy DuBord said the money would not go to support city services or programs.
Like the impact fees, the tax would be used to support capital infrastructure needed from the impacts of growth.
"It is a proposal that we believe will not only meet the needs of the revenue raised to replace impact fees but provide for a much fairer way to spread the cost of growth," said Anthony Vaida, chairman of the Impact Fee Committee.
That committee was charged with finding an alternative to impact fees that would be fair, generate equal revenue and be supported by the voters.
But Vaida expressed concerns the excise tax could generate more funds than what the impact fees were expected to bring into the city.
Vaida, who indicated he was not speaking for the entire committee, said he would like the council's assurance that if the excise tax raises more than the impact fees, it would lower the tax.
The committee had originally set the excise tax at 1 percent of new construction valuation but then upped it to 1.2 percent.
City Finance Director Don Taylor came up with the 1.2 percent figure by looking at the past two years of building permit data and the money that would have been generated by impact fees. The 1.2 percent tax on all new construction would have generated equivalent revenue as the impact fees would have collected in that same two-year period.
At the committee's request, Taylor calculated what an excise tax would have brought in over the past six months compared to an impact fee.
He found there was a $37,000 difference, with an excise tax bringing in $194,267 and impact fees contributing $157,008.
Taylor noted there was danger in making a comparison between the two in a down construction year because of the lack of new commercial and residential construction. He also said that under TABOR laws, the city could not increase the rate once the excise tax is ratified, but the tax could be reduced at anytime if the amount was generating more than what impact fees would have raised.
After postponing the second reading of the excise tax ballot issue from Aug. 20 to Sept. 3, the Impact Fee Committee met and recommended three changes to the proposed ordinance.
The committee recommended setting $275,000 as the amount that could be raised through an excise tax in 2003.
The committee wanted the council to have the authority to adopt regulations if problems arose with qualified units being sold to unqualified buyers.