Town Council lukewarm to idea of proposed tax increase

 Look for more cutbacks in service

The idea of a small property tax increase went over like a lead balloon with the Crested Butte Town Council during a recent 2011 budget work session… but it is something they will reluctantly think about. In the meantime, council instructed the staff to look for more cuts in town services.

The issue came to the forefront when town finance director Lois Rozman pointed out that the general capital budget could go broke by 2014. “It is not on solid ground,” Rozman said. “We really need to think about looking for ways to have a sustainable funding source for the capital budget.”
The town’s capital budget, which provides funds for all town maintenance, including the parks and recreation department, is funded through Real Estate Transfer Tax and Use Tax, a tax on construction materials and automobiles. Both have seen major declines the last several years. Use tax is budgeted for $87,000 this year and the RETT is slated in for $300,000. It is estimated the 2010 transfer tax will be $150,000 under budget. There is some expectation of an increase next year, but Rozman still thinks it will be less than $400,000.
In a memo to the council, Rozman said the town has delayed and deferred projects to try to maintain a healthy fund reserve but “the fund as presently structured is not sustainable. As hard as it is to think about, it may be time for the council to consider a mil levy dedicated for capital.”
Rozman said the earliest voters could consider such a tax would be November 2011. “Getting ready would take a lot of work and we’d need to gather a lot of information,” she said. “I don’t want anyone to go through the brain damage if you don’t want to do it. I want to take your pulse on the idea now.”
The pulse stopped beating quickly.
“I have no desire to go that way at all,” said councilperson Jim Schmidt. “It’s not a good climate to be asking for a tax increase. I look at some of the expenses in the budget and while I want to make them all happen tomorrow, I think we can further delay them.”
“We need to ask a lot of questions before even considering going that way,” said mayor Leah Williams. “It is something we should think about, but what is the real impact on the taxpayer? How does it break down between residential and commercial? What is the baseline we need?”
“It is our ongoing fixed expenditures that make up most of that budget,” said town manager Susan Parker. “It is wages, maintenance, cutting the grass, removing the snow, planting the flowers. We feel we need a solid source of income.”
Councilperson John Wirsing said two paving projects were in the budget for next summer and, “while I understand they are in different budgets and we can’t shift money back and forth, how will it look to the public to pave paradise and not be able to turn on the lights?”
“This is a long-term problem out there,” said Parker. “You spent $500,000 on Rainbow Park and you want to protect that investment. That is done through maintenance. I think people will pay 30 extra dollars to keep the parks up to standard.”
Rozman said the street and alley fund has a mil levy in place to fund its projects.
“I’m of the same mind as Jim. I hear the $30 argument but that’s 30 extra dollars coming from somewhere else in my budget and that’s hard right now,” said councilperson Dan Escalante. “I feel the last thing we need to do is raise anything right now. Can we put this off a year in hopes the economy turns around and 12 months from now we are all singing kumbaya?”
“When we do projects like Rainbow Park we see the costs go up for maintenance and it is something we have to be realistic about,” said Williams.
“We’ve been growing without doing anything to accommodate that growth,” said Parker. “In fact we’ve been growing in that area and cutting in others.”
“We are finding ourselves in a real pickle,” added parks and recreation director Jake Jones. “We are out of slush.”
“It’s our job to bring up the issue,” said Parker. “We aren’t recommending anything. But there is strong community support for parks and recreation in this community and I think people would support it. Our parks are highly used amenities.”
“Our most recent survey certainly shows people support parks and rec,” added Wirsing.
“You can make the ballot language specific to funding parks and recreation,” said Parker.
While the department’s programs are funded through the town’s general fund, the maintenance of the facilities is in the general capital fund.
But Escalante insisted the town try creative solutions before asking for a mil levy. “Let’s see if a business might adopt a flower box,” he suggested. “Let’s take the snow off the west side of the Sixth Street sidewalk but not the east. We need to keep our services functional but cut back where we can before raising taxes.”
“We need to look at the lifetime cost of a program,” said Williams. “We or the next council needs to deal with this. The timing could be good given the results of the Parks and Rec Master Plan study. People want these services.”
Roland Mason said it was important to keep the town services at a high standard. “We have to maintain the look of the town,” he said. “As other towns find themselves in dire situations and cut and cut, we can use it to our long-term benefit. It adds to the tourism attraction if we have a good-looking product. I think we should look into the mil levy idea as well.”
“I sympathize with Dan,” said councilperson Reed Betz. “You want to take $30 out of my pocket? No, you can’t have it. We may need to pull the plug a bit. Maybe we can’t start removing snow off the sidewalk whenever a snow flurry falls from the sky in order to accommodate three-inch heels. We live at 9,000 feet. Raising property taxes is the start of the conversation for people like me having to leave town.”
So the council is open to the idea of a mil levy but isn’t exactly rushing toward embracing it anytime soon. Any property tax increase would have to be approved by the voters. The council will continue to look over the general capital budget, which already included cutting some hours for seasonal employees and other reductions in service.
“We need to talk about a sustainable source of revenue later,” said Williams.
There was no enthusiasm for such a discussion, but Parker said the current reserves will need to be tapped to make budget.