Sales tax proposals take some heat at Candidate’s Forum

How high should the rate go?

by Mark Reaman

The audience started off the Crested Butte News Candidate’s Forum grilling proponents of two proposed sales tax increases in the upcoming election. What was expected to last ten minutes turned into a discussion lasting more than a half hour as citizens wanted answers on why they should vote to increase sales tax in the valley.

The forum opened with Jim Schmidt speaking for 2A, the ballot question asking Crested Butte voters to approve a half percent (.5 percent) sales tax increase that would be earmarked for the town parks and recreation department.

He said currently the department is funded through the real estate transfer tax (RETT), which also funds most of the town’s capital budget, so the parks and rec department is always battling with other town departments for money.

Schmidt said the RETT fluctuates quite a bit, so having a sales tax dedicated to parks and rec would solidify a portion of the town budget that everyone thinks is important and is very high profile in the north end of the valley. He noted the large growth in recreation programs over the last couple of years; even things like public trash collection throughout town has increased six-fold since 2011.

Molly Mugglestone is the campaign chairperson for 5A, the question asking voters to increase and “level” the current Gunnison Valley Rural Transportation Authority (RTA) tax to an across-the-board 1 percent. Currently the city of Gunnison collects a .35 percent sales tax, while the rest of the county collects .6 percent. This new tax would raise everyone to 1 percent but would not be applied to groceries or fuel.

The first $250,000 collected every year from the tax would go to “senior transportation,” while the rest would be split between funding airline guarantee programs and bus transportation in the valley. Mugglestone said bus use has also increased dramatically over the last few years and the money would help pay for expanded service and new vehicles.

Both Schmidt and Mugglestone pointed out that studies show the vast majority of total sales tax collected comes from visitors, as opposed to residents. “No one likes a sales tax increase,” admitted Mugglestone. “And this is a complicated issue that levels off the tax, with the money going to help keep the economy running with airline support and the buses running on Highway 135.”

In response to a question from Steve Glazer, Schmidt said the council had considered trying to form a special district in the north end of the valley to pay for parks and recreation with a property tax since it is used by people living in the area, but the council felt a sales tax was a better avenue since visitors paid the majority of the tax. “We felt the property tax idea would be extremely unfair to local businesses because they get hit so much harder than residential property owners,” he added.

“We all saw how busy it was this summer. Why do we want to raise taxes and expand summer business through more airline service?” asked another audience member to Mugglestone.

“It is a question that the community has to address,” Mugglestone responded. “Do we want to be a tourist-based economy? For the RTA to be healthy and for flight guarantees to continue, this works toward that. My understanding is that the flight guarantees are geared more toward winter. Plus, for example, if we could get another flight from Dallas, it would provide some competition that could potentially bring down the cost of the airfares out of Gunnison.”

Longtime citizen Kathy Joyce said going out to eat at a restaurant was already a luxury, so why make it more expensive by adding on two new sales tax increases.

“I know some restaurants are against this idea but it’s already pretty pricey anymore to go out to eat in Crested Butte,” Schmidt said. “This would add 50 cents to a $100 meal.”

“Most business owners I’ve talked to are having a great economy right now,” added Mugglestone. “But the question is, do we want people coming here and spending money? Most businesses say yes and this helps that continue.”

Anne Moore said if business is so great right now, that should be bringing in more sales tax already and she wanted to know if that extra revenue wasn’t being budgeted properly.

Mugglestone said the RTA has used the money to expand bus service with more trips and with more routes like the late night bus and Crested Butte South service, but the buses were already full. “We have to pay for even more expansion that people want,” she said. “The off-season schedule would expand with this.”

Crested Butte councilman Shaun Matusewicz said if both taxes pass, Crested Butte would be tied for the third highest sales tax rate in the state. “What are the towns in our competitive set doing that we’re not?” he asked.

“Some of the other places like Aspen and Vail have stronger real estate bases than we do,” said Schmidt. “If you want to go somewhere, you go there. Sales tax isn’t the thing that will keep you away. People now want enhanced amenities. The town has been frugal in the past but people want more. Our rate is high but I think we offer great facilities that people in town use and enjoy.”

“And for the RTA, the buses are tied to the housing issue,” Mugglestone added. “A lot of people use the bus to get to work. There are fewer trips in the off-season and that is a burden for some people. The RTA has a tight budget and takes full advantage of some big grants, but it needs help if it is going to expand service.”

Given time constraints for the forum, the sales tax discussion ended and Town Council candidates took the stage. See page 1 for that story.

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