In its final report, the Tax Policy Advisory Board's first recommendation is to keep the city's current tax structure intact.
Despite the lack of change, the recommendation was not an easy one. It took almost a year of weekly meetings of the 12-member board, case studies, and for some members, re-examination of preconceived notions.
The board's final report, which will be presented at tonight's city council meeting, also comes with a slew of recommendations for policy changes to improve the city's financial and taxation decision process.
"There isn't a great need to change the tax structure at this time," board co-chairman Jack Dysart said. "Steamboat is in pretty good shape financially."
In the recommendation and conclusion section, the board stated it was a 'widely held desire' to increase taxation of second-home owners, and it seemed to be more equitable to have second-home owners pay their own way for streets, police, fire, parks and other city services. Because of the state-imposed tax laws, getting a tax focused directly on second-home owners was nearly impossible, the report stated.
"Any revenue neutral exchange of sales tax for property tax would accomplish just the opposite of the board's desire; locals end up paying more," the report reads. That finding comes with a detailed case study that looked at replacing the sales tax on groceries and utilities with a property tax.
The board also discovered through another case study that second-home owners contribute as equally as full-time residents through sales tax because they are more likely to purchase goods at higher costs. For example, second-home owners are more willing to purchase expensive furniture in the city than full-time residents, many of whom go out of town to shop for home furnishings.
In the future, if the city needs more revenue for operating expenses, the board recommends it reprioritize and reduce all capital and expense budgets, increase the accommodations tax, increase sales tax to 6 percent and implement a sales tax on select services.
If the city needed funding for capital items, the board suggested that it use grants and gather contributions from users and affected groups, use debt financing and have a dedicated property tax in conjunction with debt financing.
Many of the board's 23 recommendations focused on creating policies that would improve the city's tax and financing process.
"When the city doesn't have a policy, every time you come upon a decision, it is like starting all over again, and that is extremely timely," board co-chairman Ken Solomon said.
Policy recommendations include:
n Establishing formal criteria for approval and control of any new authorities, districts or other governmental entities that have taxing powers or that isolate a particular portion of taxes for a specific purpose.
n Providing financial and budgetary reporting in a conventional business format that would make it easier for council members and the public to distinguish between ongoing operations and capital acquisitions.
n Establishing a set of policies and procedures for funding requests from special interest groups.
n Continuing support for effectively managing grant requests and creating a process that would assess the full life-cycle for the maintenance and replacement costs of the project before applying for or accepting capital grants.
The final report offers much more than just the board's conclusions and recommendations. Dysart said he hopes that chapters of the report can stand alone and offer quick tutorials about the city's tax structure.
The report has comparative analysis on the operating costs and usage of the city's tennis center, ice arena and golf course. It has a list of all the proposed tax ballots the residents of Steamboat Springs have been asked to approve in the past 20 years. It also includes case studies and commentary about the city's transport system, affordable housing and other possible taxing structures.