Rob Douglas: ‘Leaving money on the table’
June 20, 2013
Steamboat Springs — While crawling along Yampa Street trying to obey the new 15 mph speed limit, take the time — you'll have plenty of it — to think about whether you want the Steamboat Springs City Council to begin the process of saddling city residents with new taxes.
What's that? You didn't know there's a quiet discussion underway about searching for a new tax revenue stream because a contingent inside and outside of the City Council thinks the council is "leaving money on the table," as council member Sonja Macys unartfully phrased it this week?
On Tuesday evening, City Director of Financial Services Kim Weber gave a presentation to the council indicating the city plans to budget for a 3 percent increase in sales tax revenue for 2014.
After Weber's presentation, Macys cast daylight on meetings that have been taking place between council members and proponents of changing the city's tax structure.
"Some of us met with some folks from the Tax Policy Advisory Board and had a substantive discussion about the way that we're doing our budgeting and doing our business," Macys said.
"I've been questioning … whether or not looking at how much money we're going to bring in and then how we're going to spend it is the right approach.
Recommended Stories For You
"My approach is, look at what you need to purchase or do and support financially and then find the revenue to match that.
"I do continue to believe that by really only tying ourselves to sales tax and maybe not looking more creatively at where the gap might be, we are perhaps leaving money on the table that we could be bringing in to support some of the needs that we just haven't addressed.
"Maybe we need to change some of our prioritization about how we find funds and support the activities that need to be supported."
It should be noted that the rest of the council — Cari Hermacinski and Kenny Reisman were absent Tuesday — didn't react to the new taxes trial balloon Macys inflated in Citizens Hall. But they also didn't move to shoot it down before it escaped Centennial Hall.
It should be shot down.
There is little evidence that residents of Steamboat are open to the idea of new taxes. Arguably, most locals realize that before the Great Recession, the city had fallen into the habit of spending every dime that came its way while also indebting the city for years to come with the Iron Horse Inn and an excessive number of facilities that require maintenance in good times or bad.
Even before the recession hit, when tax revenue was at record levels, former council President Loui Antonucci repeatedly warned that the city couldn't continue to spend at the rate it was because the trend lines showed spending overtaking tax revenue. In short, a series of councils drunk on taxes flowing from Steamboat's development glut during the national real estate bubble spent as if the party never would end.
If there has been a silver lining in the recessionary cloud that still casts a shadow over Steamboat, the drop in city tax revenue has forced the last two councils to make difficult spending decisions that have placed the city on a path toward fiscal sobriety. With the local economy showing signs of modest improvement, this is no time for the council to fall off the wagon by ramping up spending.
Macys' goal to first determine what the council "needs" and then go after the "money on the table" of local residents if those needs exceed projected revenue is wrongheaded. As anyone who has observed elected officials for more than five minutes knows, once money is transferred from kitchen tables to government coffers, the definition of "need" expands until the coffers once again are bare.
The fiscally sound path is to keep the existing tax system and rates so that the council must continue to budget within its means and prioritize capital projects throughout time. In so doing, this and future councils will be prevented from returning to the reckless spending habits of past councils.
To reach Rob Douglas, email rdouglas@SteamboatToday.com.