Airline sales tax back on the runway in Steamboat? | SteamboatToday.com

Airline sales tax back on the runway in Steamboat?

A proposed .2 percent sales tax in Steamboat Springs to support airline service in the Yampa Valley would replace a similar five-year tax that was allowed to sunset in 2016, after five years.

STEAMBOAT SPRINGS – Steamboat Springs City Council heard a proposal at its May 15 meeting to return to partially funding the community's airline service, particularly during ski season, with a general sales tax of less than one percent.

Steamboat Springs businessman Mark Walker, co-chairman of the campaign committee, Steamboat Citizens to Ensure Air Service, appeared on behalf of the Local Marketing District board, to propose placing a question on the November ballot seeking voter approval for a .2-percent city-wide general sales tax to maintain and grow commercial air service in and out of the Yampa Valley. President of the Board of Realtors Ulrich Salzgeber is the other co-chair.

If approved by the voters, the tax is estimated to generate $1.2 to $1.3 million annually.

And it wouldn't be the first time local voters took this step. Voters here approved a .25 percent tax with a five-year sunset for the same purpose by more than 61 percent in 2011.

"Our previous air tax doubled nonstop flights to Steamboat from seven to 14, and during that five-year span, access grew from the West Coast with flights from Seattle, San Francisco and San Diego," Walker said.

For years, funding the direct airline flights has relied heavily upon $1.1 million from the Steamboat Ski and Resort Corp. and approximately $900,000 from a lodging tax for that purpose along with a healthy reserve fund. The funds are used to put up minimum revenue guarantees that assure the airlines willing to fly here that their risks involved in  committing their aircraft assets to a resort town are covered.

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The concern in 2011 was that the program's reserve fund was dwindling, and that a poor season or upheaval in the airline industry might put the flight program at risk. However, in 2016, the LMD board, with the reserves back to very healthy levels and approval of ski resort officials, voted to recommend to the City Council that the tax sunset.

Walker, who was on an exploratory committee at that time with eight others, including Steamboat Ski and Resort Corp. President and Chief Operating Officer Rob Perlman, was among those who advised in favor of letting the tax sunset in hopes that taking that step would pay dividends if the sales tax were needed again in the future.

“Some people would say 'You have momentum, you should just continue it,'” Walker said in 2016, but, “Trust is earned, and our group felt, 'Let’s gain some trust out there with the voters and let it sunset.' Down the road, when we identify a need and go back to the voters, trust is built. We felt there would be value through that."

With the announcement this spring that Jet Blue will fly direct to Steamboat from Boston, Fort Lauderdale and Long Beach, California this coming ski season, the level of revenue guarantees promised to the airlines is likely to increase.

Walker said he's been told by LMD board members that, without restoration of a sales tax for the airline program, it would likely be curtailed in the future instead of continuing to grow.

"If we don't get a new funding mechanism, we'll have to drop routes," he said.

To reach Tom Ross, call 970-871-4205, email tross@SteamboatToday.com or follow him on Twitter @ThomasSRoss1.

If you go…

What: Steamboat Springs City council learns of airline tax renewal proposal

When: 5 p.m. (estimated to be heard in first hour)

Where: Citizens’ Meeting Room, Centennial Hall, 124 Tenth St.