The Crested Butte News Serving the Gunnison Valley since 1999
But let’s call it a sales tax equalization measure
[ by Mark Reaman ]The seed for a possible excise tax on “empty homes” in the town of Crested Butte was planted during a council work session on overall financial strategy Monday evening. Councilmembers expressed interest in exploring more information on such an excise tax that they would have to put on the ballot for a possible vote this fall. While no details about size of the tax, who it would impact, where the money would go, or what would constitute an empty home subject to the fee, town officials framed it as a “sales tax equalization measure.”
A Crested Butte Community Housing Tax was defeated in 2021 by a vote of 448 to 344. The measure would have created a new $2,500 annual tax on homes in the town that are not occupied by primary residents or rented for a minimum of 180 consecutive days. State lawmakers earlier this year rejected a bill to allow statutory municipalities and counties to tax vacant residential properties with voter approval. Because Crested Butte is a home rule municipality, it already has the authority to take such a measure to its voters.
During the two-hour March 16 work session that showed there were not adequate funds to do everything the council wanted over the next several years, mayor Ian Billick asked the council where they were with exploring new funding sources. The council was in favor of such an exploration.
Given that, town manager Dara MacDonald explained that “a tax is the biggest tool governments traditionally have to generate revenue.” She said beyond raising the mill levy on property taxes, there are sales taxes, fees, new or targeted excise taxes such as the one levied on Crested Butte short-term rentals or the nicotine tax in town.
She indicated an idea has been floated from various people about a sales tax equalization measure. “Homes that sit vacant don’t contribute as much to the town sales tax to the degree homes with full-time residents do. Sales tax is a large portion of town revenues,” she said.
“Town has a relatively low property tax compared to other states,” added Billick. “Sales tax is the biggest form of revenue to towns like Crested Butte.”
Billick said the Regional Transportation Authority (RTA) is funded through a sales tax and that tax is allowed to be increased by voters. He indicated while there is room to ask voters to raise that sales tax, it hasn’t yet been deeply discussed by the RTA board and isn’t likely to be on the upcoming fall ballot, but it might get put in front of voters relatively soon in the next year or two.
“When I say I am in favor of exploring more revenue sources, I am not saying I am in favor of raising the mill levy or other taxes,” said councilmember Mallika Magner.
Billick said some sort of revenue increase might be needed to support Mountain Express. “My read of Mountain Express is that it will need a major reduction in service or more tax revenues,” he said. “With the addition of the much-needed Whetstone campus and expenses that come with it, and things like raises to drivers which they deserve, the system will need more funding to maintain current levels of service. It is running things like FirstTracks which has increased ridership but is expensive and the LateNight Taxi.”
The council supported the idea of getting further information about a sales tax equalization measure. Responding to a question from councilmember John O’Neal, MacDonald said such a measure had not been enacted anywhere in Colorado but there were cases of it being used in California and Canada. She said there was money available in the 2026 town budget if the council wanted to conduct a local poll on the issue.
“How it is framed is really important,” noted councilmember Gabi Prochaska. “It is a slow process to get people to consider something like this as a reasonable option.”
“The last time it was branded as a second home tax and it was clear people did not want that,” said councilmember Kent Cowherd.
“It’s not meant to be a penalty or an attack,” said Prochaska. “It is meant to fill a gap that occupied houses don’t have. So how it is presented is important. It’s not an attack.”
“Every tax hits different parts of the community differently,” said Billick. “Sales tax is regressive. Those living here full-time pay it more often. So, a sales tax equalization measure is not unique in that sense that it hits a certain sector of the community more than others.”
Councilmember Beth Goldstone pointed out when the second home tax failed in 2021, the town had to borrow money to help pay for the Paradise Park housing rental project.
“We have benefitted with a big jump in sales tax since 2019 and Covid,” said Billick. “But town isn’t accumulating money for the next housing project 10 years from now.”
“It’s not about the second homeowners, it’s about the empty house,” said councilmember Kate Guibert. “It’s not the people.”
The last time I think there was an idea from the second home community that philanthropy should be given a chance to fund housing,” said Billick. “I’m not sure how that worked out.”
Councilmember O’Neal is also president of the Valley Housing Fund. “It’s really hard to raise money for housing,” he said in response.
“Is philanthropy down in our valley overall,” asked Magner. “We’ve enjoyed that in our valley.”
Billick said it might be worth checking in with the Community Foundation to see if they are seeing any trends indicating less charitable contributions from second homeowners. He also pointed out much of the philanthropy in the valley goes toward things like land preservation and the arts while passing over more mundane but critically important endeavors like affordable housing.
“It seems we are in agreement to explore these measures and gather more information,” said Billick. “I for one would be interested in finding out the length of ownership for some of these older second homes in town. There are a couple of different ways to assess where we put the emphasis. No decisions are being made tonight except to gather more information on potential revenue sources with an emphasis on targeted excise taxes.”
