Advisory group to present report about Steamboat’s revenue sources
January 16, 2012
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.
Steamboat Springs — 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