The Crested Butte News Serving the Gunnison Valley since 1999
Council will consider measure at September 5 meeting
By Mark Reaman
The Crested Butte Town Council wants to see some sort of tax passed that would consistently raise revenue for affordable housing in the valley, but at Monday’s meeting they weren’t yet sure which direction they wanted to go—whether through a countywide property tax or through a town-only sales tax increase on vacation rentals.
The decision was made for them Tuesday when the Gunnison County commissioners decided to not support putting a Gunnison Valley Regional Housing Authority initiative on the November ballot.
In order to get a housing authority tax initiative on the ballot, all four funders of the authority—the county, the towns of Crested Butte and Mt. Crested Butte and the city of Gunnison—had to agree to the move. Mt. Crested Butte agreed to the idea last week. The county on Tuesday did not. So now, the council appears likely to pursue its own measure that would essentially increase sales tax on short-term rentals by 5 percent.
The town excise tax proposal that would add a 5 percent sales tax on short-term rentals in Crested Butte—and nowhere else in the valley—would bring the tax rate on such rentals to 18.4 percent. Town manager Dara MacDonald said the tax would bring in between $275,000 and $325,000 annually for affordable housing programs in Crested Butte. The money would go into the town’s Affordable Housing Fund.
MacDonald asked the council to look over the proposed resolution dealing with the potential ballot issue and voice any concerns. She will bring the matter back to the council on September 5.
Mayor Glenn Michel emphasized this potential issue was only a town of Crested Butte ballot question and would not impact rentals outside of the town limits.
“This idea was originally a Plan B if the proposed housing authority property tax measure did not make it on the ballot,” explained MacDonald.
Councilman Chris Ladoulis pushed that affordable housing money raised by Crested Butte be used for rental or seasonal rentals instead of for so-called “For Sale” projects. “Our needs are shifting from people buying deed-restricted property to rental or seasonal property. I would encourage wording in the resolution to be more accommodating to future needs rather than historical needs.”
“Future town councils would be charged with making wise decisions based on the housing needs at that time,” countered Michel. “I would leave it up to the wisdom of future councils.”
MacDonald confirmed that future councils could modify the expenditures to adjust for changing circumstances.
Councilman Jim Schmidt said the town has included some rental housing as part of its housing program. He also said that if the proposed Brush Creek affordable housing project comes to fruition, it could address a large portion of the rental needs in the north end of the valley.
Overall, Schmidt, who sits on the GVRHA board, said at least one of the issues should be put before voters. “We have all heard so many stories about people who can’t find a place to live. The county measure has polled that it would be very close. But I would hate to not do one or the other going into next year. This is a big funding potential for housing in town.”
Council had concerns with
housing authority proposal
“The need is obviously great,” said GVRHA executive director Jennifer Kermode in regard to the proposed housing authority tax. “If we don’t do it this November we are two years out and won’t collect any money until 2019. It is hitting us now and I don’t want to get further behind the eight ball. It is pretty urgent.” She said the money could be leveraged to help with several projects but a 10-year sunset that is part of the proposal could hinder long-term bonding.
A polling firm hired by the GVRHA indicated that support and opposition to a property tax measure was evenly split on the issue and it was under 50 percent.
“It will be really close,” said council member Laura Mitchell. “I don’t know.”
“I support it but we could wait to see what the county does on Tuesday [August 22],” said Schmidt.
“I have to be honest and for me it just seems not right. Is this the right tool at the right time?” asked Michel. “It feels rushed. I’m having reservations. If the county is in favor I guess we can be a team player and go with it. I’m being cautious with this one.”
Councilman Roland Mason agreed. “As a member of the RTA board, we spent a lot of time getting presentations together to make sure when we went to voters we had all the information,” he said. “We had more time and went out into the community and it barely passed. To me, if it failed this November it would be difficult to go back and ask again a year later. I am for a dedicated funding source for affordable and workforce housing. But I would say let’s hold off and see.”
“We all agree we need a long-term funding mechanism,” added Michel. “But can we go to our constituency and say this is the right way?”
“It is important for you guys to demonstrate leadership that we are all in this together,” Susan (Eskew) Kerns told the council. “We are trying to catch up and this is a role where government can step in. It’s just $10 on each $100,000 of a house’s valuation.”
The council was wary of the impact from the Crested Butte Fire Protection District mill levy that would be on the ballot this November.
“It is a lot more for a commercial property and it’s not just $10,” said Mason. “It’s the addition of a life and safety organization asking for more property tax on top of what commercial properties already pay in property tax along with this. There’s a lot of things stacked against it.”
The council had scheduled a special meeting to continue discussion on the topic next week. But with the county’s Tuesday decision to not support putting the issue on the ballot, the decision was made for the council and there is no need for a special meeting. They will look over the proposed vacation rental excise tax proposal at the September 5 council meeting.
