Sunday, September 23, 2018
Home » Editorials » One sales tax proposal is a need. The other is a want.

One sales tax proposal is a need. The other is a want.

(We will look at candidate endorsements next week after we complete our questioning of the candidates. This week we look at the two proposed sales tax increases in the valley.)

The representatives for the two local sales tax increase proposals received what looked like some unexpected pushback from citizens at the Crested Butte News Candidate’s Forum Sunday night. While the spokespersons at times looked a bit flummoxed by some of the questions, the end impression was that one of the proposals was a “need” and the other a “want.”

I think Molly Mugglestone, campaign manager for the RTA sales tax increase initiative, hit the nail on the head when pressed at the Forum. “It is a question that the community has to address,” she said. “Do we want to be a tourist-based economy or not?”

photo by Lydia Stern
photo by Lydia Stern

The community has generally answered the question in the affirmative but is obviously still struggling with some of the ramifications of that tourism growth, while at the same time embracing the benefits.

I think it needs to be pointed out that both the town of Crested Butte and the RTA are financially very healthy. Both rely heavily on sales tax already and have reaped the benefit of recent record sales tax collections. Both have been financially responsible and conservative so both carry seven figure fund balances into 2016. Passing these sales taxes will allow both entities to grow with great comfort.

The sales tax proposal for the RTA, 5A, seems easy to support. The RTA has broadened to be more than a board dedicated to subsidizing airline seats. It is also the driving force behind valley-wide transportation used by much of the dispersed workforce in the county.

Airlines flying into the valley for visitors and buses running between Gunnison and Mt. Crested Butte for locals are a “need” in a tourism-based economy. Having an organization dedicated to helping bring in high-dollar-spending tourists to our tiny rural airport is a plus for local businesses and those who make their nut serving drinks or teaching skiing. The free market in a growing tourist economy is impacting housing prices and making it more difficult for local workers to live near their Crested Butte workplaces. That is an unfortunate ramification of our growing popularity. So the fact that the RTA provides a bus that is free to riders is a big plus. It has slowly expanded service and with each expansion, whether it is a late-night bus or Crested Butte South service, the buses get used—a lot. There is a real demand for public bus transportation in the valley.

Designed with a political carrot for senior citizens, the sales tax proposal calls for a guaranteed quarter million dollars to be spent on senior transportation. The bulk of the estimated $2 million collected annually would be split between bus service and airline guarantees. Seems logical right now to expand winter air seats and off-season bus routes. If we believe in the tourist-based economy, this sales tax should improve and expand both air and ground transportation opportunities.

My friend and RTA executive director Scott Truex has stated that under the current model the RTA can have a great airline program or a great bus program but not both. A tourist-based economy needs both.

Longtime Crested Butte resident Kathy Joyce hit the nail on the head as well at the Candidate’s Forum when she said it felt like the town was going for a bunch of “wants” as opposed to “needs” with its proposed sales tax increase for parks and recreation. That seems to me the deal as well with 2A, the town sales tax initiative that would bring in about a half million bucks annually, earmarked for parks and recreation facilities and programs.

Don’t get me wrong—I like the new comforts that have come with the tourism growth in the valley since I got here. I like the high school, the Arts Center, the grocery store, the movie theater, the flower boxes, the new fields, the restaurant choices, the radio station, the new bike and Nordic trails, the covered ice rink, all of which weren’t here 30 years ago. While I feel so lucky to have been here then, I wouldn’t want to go back to the “good old days.” We have been spoiled with the amenities that have come with the growing “tourist-based economy” and I am good with that.

Which goes to the town’s sales tax proposal. The town has literally millions of dollars in its reserve funds. It is fortunate. My friend Jim Schmidt is heading up the push for the parks and rec sales tax and he points out correctly that many Colorado communities were pounded when struck with natural disasters such as floods. A similar catastrophe could happen here, and to be as prepared as we are is a good thing. While a flood could happen in a big spring, I worry more about a wildfire in the surrounding forests during a dry summer. Good reserves are a good part of a financial plan.

I roll my eyes at the town’s strident position that if the tax doesn’t pass the first thing to go will be amenities such as flower boxes on Elk Avenue and anything else people like. That tactic irks me. If the council doesn’t have the sense to make good choices during robust financial times without punishing citizens who might not vote for a sales tax, they shouldn’t be on council. Just because parks-and-rec is funded primarily through real estate transfer taxes doesn’t mean bonus sales tax money can’t be diverted there. And Elk Avenue is the money magnet that shouldn’t be used as a threat.

So this sales tax is about “wants.” Proponents talk about wanting a town campground at Avalanche Park. They talk about wanting better ice rink facilities such as locker rooms and refrigeration. They talk about a new skate park or improvements to the current Crank’s Tank. They talk about developing the Eighth Street Greenway and having to collect more trash around town.

The fact is hundreds of thousands of dollars in additional sales tax over what was budgeted has been collected just this year. Every month, sales tax collections are setting new records. The council members are comfortable, as they should be, donating $1 million in cash and in-kind work contributions to an expanded Center for the Arts. Jim recently pointed out that sales tax revenue has doubled from just ten years ago.

The 2016 budget anticipates the town’s general fund to have $3.4 million in reserves next year. The budget expects to have $2.3 million in capital fund reserves next year. Throw in an expectation of a couple hundred thousand dollars more in the sales tax reserve fund and you are touching on close to $6 million in three reserve funds. The town is not broke.

It is good to have healthy reserves. Things pop up that are unexpected. The town is having to purchase things like empty lots for snow storage. I understand the council wants to put more money into affordable housing and recreational amenities. But there has been no council discussion on what an appropriate emergency reserve should be and that is slack when asking for a tax increase when a main argument is having appropriate reserves in an emergency.

If passed, will the CB sales tax increase free up money for the rest of the budget and take pressure off the staff and council? Yes. Will it make it easier and more comfortable for everyone in town hall? Yes. Will residents get more things they want? Yes. Is this sales tax a real, immediate “need” for the town? No.

Now, the beauty of both tax increase proposals is that the majority of the money will be raised from tourists. The tax increases will add pennies to most local purchases. It is growth paying for its own way—and we get many of the benefits.

If both taxes were approved, the town sales tax rate would sit at 9.4 percent, still below the scary 10 percent threshold but one of the highest in the state.

The proposed RTA sales tax increase is a “need.” The proposed town sales tax increase is a “want.”

—Mark Reaman

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