Advisory group to present report about Steamboat’s revenue sources

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Past Event

Steamboat Springs City Council meeting

  • Tuesday, January 17, 2012, 5 p.m.
  • Centennial Hall, 124 10th St., Steamboat Springs
  • All ages / Free

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Agenda highlights

5 p.m. Liquor License Authority meeting

5:05 p.m. Call to order; Reports, including Golf Committee member interviews, Tax Policy Advisory Board report; presentation of possible strategic initiatives to save money and generate new revenue; development review process revision presentation; update on salary surveys and pay plan development; update of oil and gas issue; a resolution to provide matching funds for Congestion Management/Air Quality grant funds; a resolution supporting the creation of a Creative District downtown; and a resolution adopting the modification to the Bear River Parcel Master Plan to include a bike skills park.

7 p.m. Public comment; and an amendment to the development agreement for Howelsen Place for alternative compliance to satisfy affordable housing requirements.

— For the second time in seven years, a volunteer group that evaluated the city’s tax structure isn’t recommending significant changes to the way Steamboat Springs generates revenue.

The Tax Policy Advisory Board will present a 118-page report to the City Council on Tuesday night that affirms Steamboat’s sales tax-based revenue structure. Among other tasks, the board evaluated whether some share of the city sales tax should be replaced by a property tax, thought by some to be a more equitable way of sharing the tax burden with second-home owners.

A previous report was released by a different volunteer Tax Policy Advisory Board in 2005.

Tax Policy Advisory Board co-chairman Jack Dysart said Monday that the 2011 group’s research actually revealed that replacing some portion of the city’s sales tax with a property tax would have the opposite effect — namely, that second-home owners wouldn’t pick up more of the tax burden. The report states that 45 percent of the city’s sales tax revenues is generated by full-time Steamboat Springs residents, 35 percent is from visitors and 20 percent is from regional residents.

“We’d be shifting revenues paid by tourists to an equivalent revenue paid by residents, which we thought would be met with considerable resistance,” Dysart said, adding that an amendment to the state constitution made a property tax equally unattractive for local commercial property owners. “When it was all said and done, almost every scenario we came up with, the majority of the board said, ‘It doesn’t work. We can’t support it.’”

The group in July voted against a recommendation to the City Council that Steamboat ask voters to consider a small property tax to replace the 4 percent city sales tax on groceries.

Dysart said the board was split on replacing the grocery sales tax with a property tax; it was the only disagreement amongst the 12-member group.

City Council President Bart Kounovsky said the report affirmed that the city’s sales tax-based revenue structure, which showed consistent growth until 2008 and the onset of the recession. He said had the city been reliant on property taxes, it may not have felt the decrease in revenues as quickly.

“It forced us to deal with the decrease in revenues immediately,” he said.

Kounovsky added that the reductions and cuts made in the past three years have put the city on sound financial footing moving forward, which the Tax Policy Advisory Board noted in its report.

Kounovsky praised the Tax Policy Advisory Board for spending more than a year creating a document that would benefit Steamboat in future years. He said it included a number of recommendations for the city to consider.

They include: creating a multiyear financial plan to use unanticipated revenue; to make enterprise funds self-sufficient; to expand the quality of infrastructure and amenities to attract new taxpayers, including location-neutral businesses; and to host a public meeting to discuss the group’s recommendations.

The report didn’t recommend implementing any form of admissions tax, such as a lift ticket tax, which the Tax Policy Advisory Board estimated could generate $1.6 million annually. It also didn’t endorse charging for the city bus service, a change that could generate $300,000 annually.

“The board concluded overall that sales taxes, as a source of revenue over time, has been a pretty good source of revenue,” Dysart said.

To reach Jack Weinstein, call 970-871-4203 or email jweinstein@SteamboatToday.com

Comments

BeCoolHoneyBunny 2 years, 3 months ago

How about a property tax for non-resident homeowners to replace or lower the grocery tax? It seems to me these folks are the ones who get to have their pie and eat it too.

A lift ticket tax sounds fair now that Ski Corps benefits directly from the new sales tax that funds the airline program.

The free bus is a big line item, I think it needs to be looked at.

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Scott Wedel 2 years, 3 months ago

It would be illegal to impose a property tax on non-resident homeowners.

Lift ticket tax would seem to be fair considering how much they are benefiting from various programs and with current lift ticket pricing then it would not be credible for ski corps to claim any serious consequences. For example, after paying for a SB vacation and a $99 lift ticket then it doesn't make sense to argue it would discourage tourists from visiting if there is a lift ticket tax.

Free bus for local service (trips to Craig are not free) is a big tourist amenity. And not trying to collect fares allows people to get on much faster which matters during busy times. There is also significant cost to collect and audit collected fares.

What gets me is City of SB gets so much money as a tourist city and so has so much to spend on discretionary spending and yet always is searching for more money so they can add more discretionary programs. Someone should make SB city staff deal with Hayden or Craig city budgets and teach staff what it is like to not have oodles of discretionary funds.

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John St Pierre 2 years, 3 months ago

One area the city is ignoring for additional $ isthe fact that many of the timeshares are converting to "poiints systems". Timeshare owners convert their ownership (for a fee) to points which renew every year for another fee.... Wydham, Legacy etc.. retain ownership and then essentially rent out the units..... time share units do not pay lodging tax,,,,,,,, SB needs to jump all overthis... THE CITY NOT GETTING ITS LODGING TAX ???????????? SB needs to focus on collections making a fair competitive market for those business's who are honest........

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BeCoolHoneyBunny 2 years, 3 months ago

You're right Scott, thanks for the knowledge.

"Colorado law is very restrictive on new tax matters, and for a property tax, the unequal treatment of non-residential property due to effects of the Gallagher Amendment are difficult to overcome."

http://worldwest.media.clients.ellingtoncms.com/news/documents/2012/01/16/TaxPolicyAdvisoryBoard_Report.pdf

Looks like a rebate program is more applicable.

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BeCoolHoneyBunny 2 years, 3 months ago

Many members of the TPAB supported the concept of expanding the tax base to those who are perceived to contribute less than their proportionate share of the tax burden. Colorado State law seriously inhibits any attempt to accomplish this equality of treatment.

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