Paul Hughes: Men behind the tree


“Don’t tax me and don’t tax thee; tax that man behind the tree.”

— Sen. Russell Long

One reading of this much-repeated saying is, “You and I are paying enough taxes already. Let’s see if we can find someone who isn’t paying as much, and let’s tax him.” In most cases, there is no such person, but here in Steamboat, we have two. Those well-hidden “men” are second homes and businesses. If they were to share the tax burden with the rest of us, we all would be better off.

The Steamboat Today’s Sept. 12 editorial (“Steamboat’s fiscal health may require service cuts”) misses the point. The city of Steamboat Springs might well need to make service cuts if it had exhausted its available revenue sources, but it hasn’t. In fact, much of the city’s well-publicized financial woes during the past four years stem from this City Council’s refusal to ask the men behind the tree to pay their fair share of the costs of running the city.

Way back when city voters decided to eliminate the progressive property tax in favor of a high, regressive sales tax, the conventional wisdom was that tourists would pay the lion’s share of city costs so that residents would pay relatively little. That hopeful scenario died years ago. Most locals probably will be shocked to learn that they, not tourists, pay the biggest share of city sales taxes. A 2008 study conducted for City Council by Economic & Planning Systems, Inc. revealed the ugly facts: residents pay 41 percent of all sales taxes, tourists pay 35 percent, county residents pay 18 percent and second-home owners pay just 6 percent. And businesses? Because businesses spend little on retail goods, they pay little or nothing for the services the city provides for them. As the 2012 Tax Policy Advisory Report summarized, “full-time residents ... have been subsidizing the basic City services that are provided to second homes and businesses, and they have been doing so for decades.”

The startling imbalance in tax burden between full-time residents and second-home owners is highlighted by the fact that second-home owners, who pay just 6 percent of sales taxes, sit on 62 percent of the city’s total residential assessed valuation. A small property tax would bring to the table more than 4,000 second homes and 3,500 businesses to share the tax burden for the first time. The city would have at its disposal a much larger taxable base from which to draw needed revenue, only as approved by voters. Doing so also would allow the voters to eliminate onerous regressive sales taxes such as those on food and groceries.

The goal is not to sock it to second-home owners or businesses. The goal is to create a fairer, more flexible tax structure that reflects today’s reality, not that of 40 years ago, and in doing so, to ensure the city’s financial health for decades to come. It is not council’s job to march to the beat of Grover Norquist’s no-taxes-ever drum. Nor is it council’s job to starve deliberately the very organization it has been elected to oversee. City Council’s only job is to take the very best possible care of this city and its residents. Cutting services every time unreliable sales tax revenues drop is no way to take care of this special place.

City of Steamboat Springs voters have not had an opportunity to revisit our tax system since the 1970s. It’s time to allow them to do so, and it is incumbent upon City Council to ask them for their opinion no later than November 2013.

Paul Hughes

Steamboat Springs


Scott Wedel 4 years, 7 months ago

Please let SB voters vote on whether to implement a property tax. That will finally put an end to the even bigger city government people saying how adding a property tax will be an improvement.

Go ahead and put it on the same ballot as spending $15M to $20M to move police and fire from Yampa St to a demolished Iron Horse and a newly purchased site.

The "ugly" fact that SB residents pay 41% of the collected sales tax actually suggests the sales tax is a brilliant solution for SB residents. That is an incredibly effective tax someone else for the benefit of SB residents.


Dan Hill 4 years, 7 months ago

Paul, I don't disagree with you on raising property taxes rather than sales taxes. Not necessarily aimed narrowly at second home owners but with the effect of raising their share of the tax burden. We need to be careful to keep a balance though. They use fewer services than full time residents. I'd love to see some estimate of what percentage the do use.

I'm interested though to know what services you believe are being provided by the City to businesses that they aren't paying for. If I drive to the store, is the road I drive on a service being provided to the store or to me and do you realize sales tax is collected on my purchases there? Even take something like police dealing with drunks late at night. Maybe the drunk (and his idiot buddies who should have been looking our for him) have already paid for that service through the sales tax on the excessive amounts of alcohol he has already consumed?

I think you are falling into the trap of seeing taxes on business as easy pickings. Trouble is they don't pay taxes.They pass them on as some mix of customers paying higher prices, employees receiving lower salaries, or owners receiving lower profits. I can see people saying "that's fine, slug the owner, capitalist running dog that he is." Fine until he decides Steamboat is a lousy place to do business and takes his capital (and the jobs) elsewhere. Please don't fall into the trap of thinking that taxes on businesses are not ultimately paid by real people.

I think you could have made more of the argument about the volatility of a sales tax only revenue base. You hint at it but it's not clear to what extent you are arguing for an increased tax burden vs a different taxing structure. Revenue neutral tax return and increasing taxes are two very different propositions.


Steve Lewis 4 years, 7 months ago

Paul, After sitting though a few hours of tonight's City Council meeting, I appreciated reading your thoughts. We disagree on the taxes a bit, but you absolutely pegged something else more important and lasting: City Council’s only job is to take the very best possible care of this city and its residents.

It was a pleasure to watch two new Councilors, one I voted for and one I voted against, doing exactly that.


Fred Duckels 4 years, 7 months ago

Money is nice but going the lean times certainly wrings a lot of nonsense out the system.


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