The recent City Council debate about requiring big box retail in the proposed Steamboat 700 annexation, coupled with our current precipitous decline in sales tax revenues, once again has brought the sales tax discussion to the fore. Is it time to revisit the conclusions and recommendations of the Tax Policy Advisory Board, presented to City Council on Feb. 1, 2005?
The basis for the TPAB's recommendation against "any change to the City's tax structure at this time" was that during a 10-year period, sales tax revenue growth outperformed property tax revenue growth. Although this may have been true then, now, facing an uncertain future, did we frame the analysis correctly? Were the assumptions correct? Did we ask the right questions?
A sales tax-supported government never sees a commercial development it doesn't like. It has no choice. If it wants to keep up with services, improve services or add new services, it must embrace retail growth, even if it puts government at odds with its citizen-driven community plans and surveys. It must stop leakage; it must increase not only local and visitor sales but also regional sales. In short, it must become a regional commercial center and it must grow, grow, grow its retail base.
There is no surer way to do this than to entice a big box or two, and through incremental change and cumulative impact, a sales tax-based community wakes up one morning realizing it has become Generica, USA. The best it can do is pretty up the facades and demand concessions to mitigate impacts on its community character. A devil's bargain and a great community vision, eh? We can, if we choose, realign our tax base and free ourselves to define a different future.
In a community where second homes comprise nearly 50 percent of the housing stock, city and county residents and visitors unwittingly subsidize second-home owners, of whom more than 50 percent are here no more than six weeks a year. What if we replaced half of the annual sales tax revenue with a property tax? What if a property tax rebate program for local commercial property owners relieved their current lopsided burden imposed by the Gallagher Amendment? What if the property tax revenues were dedicated to essential services? The second-home owners would pay their fair share of local services, the commercial property owners would not be unduly burdened, and the city would liberate itself to make choices that were better aligned with citizen aspirations as expressed in community plans and surveys.
When we participate in drafting community visions and plans, when we volunteer with community nonprofits and recreation programs, when we bemoan the loss of Boggs Hardware, we are expressing our "citizen selves." The citizen self supports the local independents because it knows that local business owners support the community. Their daily receipts don't get wired to Bentonville, Ark., at the end of every business day.
But when we bypass Boggs Hardware for a regional or national store, when we drive to Silverthorne or Denver to buy blue jeans or cheaper underwear, when we seek the lowest price no matter where it can be found, we are expressing our "consumer selves." Schizophrenically and unintentionally, we are undermining everything our "citizen selves" are striving to build and maintain.
Our tax policy reinforces the consumer self. If we adopted a property tax to reduce our dependence on the sales tax, we could nurture our citizen self, the self that desires to preserve Steamboat's small-town character. We liberate ourselves from the "need" to capture more sales dollars, we balance our consumer selves with the good of the whole community, and we break the linkage between the sales tax and the inexorable march toward Generica, USA.
Towny Anderson is a member of the Community Alliance of the Yampa Valley