The Crested Butte News Serving the Gunnison Valley since 1999
2A, 2B, 2C explained
With Election Day less than two weeks away, many Mt. Crested Butte voters are probably wondering how to respond to the three tax questions specific to their ballot. This is the second year in a row the town has asked voters to increase taxes to stabilize the town’s finances. Last year, voters turned down a ballot issue that would have kept the town’s sales tax rate at 4.5 percent, removed financial restrictions on the town’s capital mil levy, and increased the general fund mil levy by three points.
However, voters did approve a ballot question that allows the town to take on more than $6 million in municipal bonds to fund a variety of capital improvements projects. However, without an additional revenue source, the town has been unable to take any bonds for capital improvements in the past year.
This year the town of Mt. Crested Butte is putting three questions on the ballot, and all three affect different areas of the town’s budget.
The town is expecting some significant cutbacks if the ballot issues fail this year. According to the town’s Five Year Financial Plan, those cuts would include two full-time employees, eliminating a donation to the Nordic Center to groom the Rec Path, losing the lease on the Snowmass free public parking lot, and cutting the recreation department.
Failure of the ballot issues this year would also lead the town to continue cuts made during 2009, including several landscaping personnel and supplies, funds for noxious weed control, and a reduced amount of donations.
2A: Sales tax increase
This question will ask Mt. Crested Butte voters to increase the town’s sales tax to 5 percent from 4 percent. That would provide about $300,000 more to the town’s general fund budget.
In January 2009 the town’s sales tax rate dropped to 4 percent from 4.5 percent, due to the failure of ballot issue 2A in 2008.
According to the town’s financial plan, sales tax collected by local residents is estimated to be about 2 percent of the total sales tax collected. The increase presented in 2A is estimated to cost a local resident about $10 a year.
The town will collect approximately $1.3 million in sales tax revenues during 2009. In previous years the town has collected about $1.5 million.
2B: Admissions tax renewal
This ballot question asks for renewal of an existing special tax. The admissions tax is a 4 percent tax charged on any event held within the town of Mt. Crested Butte that requires admission or a ticket. That includes lift tickets and season passes at the ski area, as well as concerts or things like snowcat sleigh rides. The town gets about $450,000 a year in admissions tax revenues.
The tax, approved by voters in 2002, will sunset next April.
The admissions tax is used for two purposes, marketing and transportation. Currently the admissions tax funds are split, with 75 percent going to marketing purposes and 25 percent going to transportation. For the funds allocated for marketing purposes, the town has set up an admissions tax grant committee, which reviews grant requests for marketing programs and provides money to various businesses, including Crested Butte Mountain Resort, Crested Butte Lodging, and the Crested Butte Music Festival.
The remaining 25 percent is given to the Mountain Express bus service. Mt. Crested Butte councilman Gary Keiser is on the Mountain Express board of directors, and says the town’s contribution makes up 10 percent of the bus service’s budget. Without that additional funding, he says, the Mountain Express would likely have to cut some of its routes.
Ballot issue 2B will also change the legal wording of the existing admissions tax. First, it will eliminate the sunset clause, allowing the tax to continue indefinitely unless repealed through a future ballot issue. Second, it will allow some leeway in the way funds are spent by allocating “no less than 25 percent” to transportation, thus allowing the town to contribute more money to Mountain Express if necessary.
2C: Remove restrictions on mil levy
Ballot question 2C will ask Mt. Crested Butte voters to remove the financial restrictions on the town’s existing capital mil levy. Currently, the town cannot use the full 5.37 capital mil levy because of restrictions imposed by the TABOR (Taxpayers Bill of Rights) amendment. About a quarter of the property tax revenues received through the mil levy must be returned to taxpayers via a rebate, effectively reducing the mil levy to about 3 mils. Removing TABOR restrictions on a tax is often called “de-Brucing,” after Douglas Bruce, the state lawmaker who created TABOR.
The extra funding the town would get through a passage of this question could be used only for capital purchases and improvements. Passage of this question would cost property owners about $20 a year per $100,000 in assessed valuations, according to the town.
In addition to providing funds for needed repairs to the town hall and park pavilion, the de-Bruced capital mil levy funds would also be used to improve the town’s roads.
The passage of ballot issue 2B in 2008 authorized the town to draw more than $6 million in municipal bonds. If ballot issue 2C passes this November, the town anticipates taking out $2 million in bonds to completely fix the town’s aging roadways and keep them in first-class shape. The additional funds accumulated by de-Brucing the capital mil levy would be used to pay back the bonds.
On the county ballot
Ballot issues 1A and 5A
1A: Energy Smart Loans
If approved by voters, ballot initiative 1A would allow Gunnison County to issue bonds, giving property owners access to low-interest Energy Smart Loans to pay for improvements to a home’s energy efficiency.
The resulting bond debt would be borne entirely by those county residents who voluntarily participate in the program. The Energy Smart Loan would be repaid through the property tax mechanism and the debt would stay with the home, not with the borrower.
Under the program, the county would have to accept a certain, unspecified number of applicants into the program before any bonds could be issued. Any administrative costs not captured in program fees would fall to the county, but the expectation is that those costs would be covered by the loan program.
5A: Local Marketing District
Referendum 5A is an option to renew the Local Marketing District’s 4 percent tax on overnight stays in Gunnison County. Funds generated by the tax would continue to be invested in marketing the Gunnison Valley as a year-round tourist destination.
If the initiative were approved, the tax would be renewed in perpetuity and would not sunset after a certain period of time. The tax is paid entirely by those who purchase overnight accommodations in the Gunnison Valley.
The marketing fund generated by the LMD tax was more than $1 million in 2008, a 30 percent increase from when the tax was introduced in 2003.
