Council leaning toward potential sales tax increase for Parks & Rec

Taxing weed also an option

The Crested Butte Town Council wants to learn more about the pros and cons of asking voters this November to increase the town sales tax rate to fund Parks and Recreation maintenance.

The council has been discussing how best to get more money into the department to take care of Parks and Recreation assets and programs. That funding currently relies on real estate transfer taxes (RETT) that fluctuate year-to-year depending on property sales in town. Finding a new source of money would in turn free up money to help capital projects in other town departments.
At a work session on Monday, March 17, the council focused on the sales tax increase approach. While also hoping to investigate the idea of bringing in more money for parks with an excise tax on retail marijuana sales, the council primarily focused on investigating a sales tax increase.
“I think it is a reasonable way to go,” commented Councilman Jim Schmidt. “It’s five cents on every $10. That doesn’t freak me out. It appears we are in the same ballpark as other Colorado resort towns when it comes to sales tax, so I think this is an avenue worth looking into.”
“We’ve been pragmatic looking at a number of other revenue sources and this looks like the best option,” agreed Councilperson Glenn Michel. “Ultimately it would be up to the voters to say yes or no.”
“While I think it would be difficult to pass, I think it is something to investigate,” said Councilperson David Owen. “I think it would be easier if we find places in the budget to save money and then go to the voters.”
“I agree we should look for savings elsewhere,” said Councilman Chris Ladoulis, noting that a sales tax increase is a more consistent revenue source than grants. “I have some qualified support to look at this further,” he said.
“I’m not in favor of a sales tax increase for this,” said Councilperson Shaun Matusewicz.
“I don’t think the voters will support it. I think a better way is an excise tax on local marijuana sales,” Matusewicz suggested.
“It’s not a perfect solution, but a sales tax is worth investigating,” said Mayor Aaron Huckstep.
“We will need to clearly explain the need for this to the public,” said Ladoulis.
“Sales tax is an equitable mechanism,” added Michel. “People living in or outside of town but who use the parks would be contributing.”
“People would be facing a choice of increasing the sales tax or cutting service,” concluded Town Manager Todd Crossett.
“That wouldn’t be the definitive case,” said Councilperson Roland Mason.
“We would probably have to cut some things,” responded Crossett. “The status quo can’t be on the menu for much longer.”
Mason suggested asking voters to enact a new admissions tax. Such a tax is a boon to Mt. Crested Butte. Matusewicz said as opposed to Mt. Crested Butte, which taxes lift tickets as a major part of the admissions tax, income from Crested Butte events and tickets are primarily from nonprofits. He had a fairness and revenue issue with the idea.
“I feel after the recession started in 2008 and 2009 the town did a lot of cutting. It’s pretty lean. I’m not sure what else we can cut in the budget,” said Mason, “but I don’t think a sales tax alone is the final solution.”
“I think people would support it if it is specific to Parks and Recreation,” said Schmidt. “We can’t just say we’ll use it for the general fund.”
“Maybe we should use the [chamber of commerce] to reach out to the businesses in town and get their view on it,” suggested Michel.
“I’d suggest we do more research,” added Matusewicz. “We should get the community’s perception of the need and the use of a sales tax increase. We can perhaps survey people through social media.”
“We can also use the Colorado Municipal League to see how sales taxes have been received in other places,” said Huckstep. “Holding a public forum on this topic might be another way to go.”
“If we polled people now they probably wouldn’t support the idea,” said Michel, “but we haven’t told our story yet. That will take a lot of legwork.”
Lois Rozman, town finance director, said the councilmembers would be the ones to formulate the ballot language but would then have to stay somewhat neutral on the matter and present pros and cons of the idea. “The town couldn’t, for example, buy yard signs and buttons,” she said. “That would have to come from a citizen’s committee.”
“Where’s the threshold of support you’d need to see to continue forward?” asked Matusewicz. “Is it 51 percent? If 75 percent say no, now do we start over?”
Rozman said if the council pursues this option, they have until July 25 to notify the county a ballot measure is coming. They would have to certify the official ballot language to the county by September 5. She estimated the cost of the election would be about $4,000.
Huckstep asked the staff for dates and deadlines of technical matters that would need to be taken care of between now and July 25 to get a potential sales tax issue on the ballot. He also asked the staff to gather information needed by the council to decide whether or not to move forward. “We need feedback on the public’s tolerance for a sales tax increase,” he said. “This is a $250,000 to $500,000 problem,” he said.
 A .5 percent increase in town sales tax would raise about $287,000 each year.
“People will want to know if there is any fat in the budget we can reallocate. They want to be sure we are effectively using our money,” said Michel. “We need to keep the public informed.”
“When I hear about if money can be reallocated, look at the five-year budget plan,” said Parks and Recreation’s Jake Jones. “It shows what is being cut. It takes any reserves to the ground. We have tennis courts and skate parks at the end of their life and we can’t maintain them.”
“It comes down to what you are willing to live without,” added Crossett.
“We should look at everything,” said Owen. “Moving Jake’s department out of the capital budget and combining police forces with Mt. Crested Butte might be options.”
“You might be looking at things like not taking care of the sidewalks and cutting back on the staff time spent on all the events in town,” said Crossett.
The staff will gather information concerning a possible sales tax increase and excise tax on marijuana sales and will report back to the council.