Groundwork being laid to ask CB voters for sales tax hike

Marijuana tax a possibility too

by Mark Reaman

While no decision has been made by the Crested Butte Town Council to again try getting a .5 percent sales tax increase passed by voters this November, the groundwork for such a ballot issue is being laid by town staff. With some guidance by the Trust for Public Land, the staff is hoping to put the issue before voters this November, with the approximately $350,000 collected each year being earmarked for parks and recreation maintenance.
The TPL provides free assistance to local governments seeking to pass such ballot initiatives and the council gave the okay to the staff to work with the TPL on a feasibility study and some research. Last year the real estate transfer tax (RETT) brought in $1,020,992. Half of that money goes to open space projects and the other half to town capital projects, including park maintenance. Given the massive growth in town programs and facilities, that amount is pretty tight.
The TPL went over some issues already discussed by council last year. A sales tax or a marijuana excise tax appears to be the most logical source of increased revenue. A 5 percent excise tax on marijuana sold in Crested Butte would be expected to generate between $115,000 and $120,000 based on the $2.4 million in weed sold in town in 2014. Town staff says that is only about half of what is needed for parks.
The TPL report presented to the council on June 15 showed the town currently has a 4 percent sales tax, which is 1.5 percent more than Breckenridge and 1 percent less than Winter Park’s 5 percent.
The report stated an average of $91 could be expected to be garnered from each local household with a .5 percent sales tax increase. Overall, local residents account for about 21 percent of total sales tax, so town finance director Lois Rozman pointed out there is a five-to-one benefit to locals through sales tax.
“The TPL didn’t think it was necessary to do polling of voters since there was a pretty good poll taken last November when the sales tax initiative failed,” town manager Todd Crossett told the council. The issue was defeated by three votes, 397-400.
“I’m a little concerned with how high we push sales tax to visitors,” said councilman Chris Ladoulis. “Will it start to keep people from spending? Will it force some businesses out into the county or down to Gunnison? We are already at the high end of the sales tax spectrum at 4 percent.”
Crossett said the TPL recommended choosing either the sales tax or the marijuana excise tax to put before voters. “TPL guessed that having two tax issues would make it harder to pass either. They recommend choosing one,” he said.
Rozman reiterated that park usage is outgrowing the pace of sales tax collection. The RETT is not even close to keeping up with the increase, she said.
“Since 2010 we have seen a 600 percent increase in trash collection in our department,” said Crested Butte parks supervisor Pete Curvin.
Ladoulis asked if there were other ways to fund the parks. Rozman said the town is already putting some sales tax revenue into the capital fund. “We are tapped out,” she said. “We need more employees if the council wants any more projects, for example.”
“Pete and his crew maintain Elk Avenue like a park,” said parks and rec director Janna Hansen. “It’s basically a park and right now we don’t have enough funding for any more bike racks for example.”
“Elk is growing at a similar pace as the parks,” Curvin said. “It’s all growing. There are more events but not much more manpower. It is stretching us.”
“You don’t see the main street in most communities being treated like a park,” noted Crossett.
He said the TPL was helping to craft language for a ballot issue and he told the council the first benchmark to get a ballot issue on this November’s ballot was July 24, when the town would have to notify the county clerk it intended to participate in a coordinated election. Crossett plans to have a resolution in front of the council stating just that by their second meeting in July.
“Is the effort to convince four voters or the other 50 percent?” asked Ladoulis. “Have we learned any more since last time? There are some same questions the 50 percent will have that we should answer.”
“My gut feeling is that this is a good thing and will serve the town well into the future,” said councilman Jim Schmidt. “We no doubt have large reserves and I have had similar questions. But look at last year’s floods in Colorado. The towns that were impacted are in huge debt right now. If we had a big runoff the First Street bridge could have washed out. We need big reserves to deal with such things.
“It’s five cents on a $10 glass of wine,” Schmidt continued. “Fifty cents on a $100 pair of shoes. That’s a good deal to take care of our parks. We have good reasons we can talk to the people about.”
Crossett told the council they needed to decide if the sales tax or marijuana excise tax was the appropriate route.
Councilman Glenn Michel wanted to make sure the voter rolls were purged thoroughly before the election.
Councilperson Shaun Matusewicz said he was not in favor of increasing the sales tax but felt a tax on marijuana would pass easily in town. “I actually think you could give voters the choice for both,” he said.
“Part of the issue with a marijuana tax is that everyone will want a piece of that money,” said Ladoulis.
The council has less than a month to decide which way, if any, they want to proceed.