Another shot at a second home tax in CB… the right step?

Let’s start with some facts. The potential Crested Butte second homeowner tax will only apply to those homes in Crested Butte and not in places like Skyland or Meridian Lake or Mt. CB. There are 465 “non-primary residences” in CB that include second homes, short-term rental properties and vacant homes. The town is in the midst of a comprehensive analysis of its long-term financial situation. At the moment, town finances are good – some would say sweet. There are robust reserves and no worries about having to close town anytime soon because of fiscal shortfalls. There is no crisis staring us in the face (pray for the monsoons!). But the trends are obvious as it costs more to fill potholes and pay for rising health insurance premiums for employees. There are some flashing lights on the horizon.

Now some assumptions. If a vacant home tax is put on the ballot, CB second homeowners will be pissed. They will feel singled out and separated by the general community. Despite veiled threats, the second homeowners will not stop contributing to local non-profits, especially the big ones like the CB Land Trust and Center for the Arts. A petition I saw circulating last week that concluded with the signers asking for fewer services from town is thin. It is easy to say you want fewer services until those services go away and then you’re mad when you can’t use the park or trash is piling up outside your favorite Elk Avenue restaurant.

I support the need for the hard conversation over the future of Crested Butte finances. The town council is being responsible in trying to figure out how to compensate for future price spikes that obviously will continue to throw a wrench or two into the town budgets in the future.

My initial instinct is that I am not a fan of the proposed second homeowner tax to solve the problem. Based on the polling data released this week, that puts me squarely in the minority of people that live and vote in Crested Butte. BTW, I neither live in nor vote in CB. While I’m somewhat surprised that the polling concluded two-thirds of town voters think it’s a good idea to tax the second homeowners $3,400 a year to pay for capital needs, I’m okay not being in that group. It just doesn’t feel right to me.

It seems some on the council look at the tax as a way to address the greater national and worldwide affordability situation. They seem to view all second homeowners as Jeff Bezos and Elon Musk and all locals as struggling workers in huge debt. There is probably some truth to both stereotypes but that is too simple a picture.

Look, Crested Butte prides itself as being a different place at the end of the road. And it is. I would argue that many of the second homeowners in town bought their old mining houses 10, 20 or 30 years ago when it was possible to get a place for a relatively affordable price. They liked the small town, relatively blue-collar vibe and wanted to share that with themselves, their kids and their grandkids. They joined the community.

Admittedly, after Covid the dynamics changed. The price of entry exploded and the family from Tulsa that could afford a decent home on Sopris that they could drive to for some skiing and some wildflowers was no longer in the game. Multi-million-dollar homes became the norm and the people buying them could fly into those homes a few weeks a year on their private jets. I am sure that some see Crested Butte as just another pretty trophy with nice amenities they can use without having to learn what The Depot is or what people mean when they say the Gasser working man’s special is a great walk of shame cure.

I’ll play into the stereotype and say that some of the people buying into town now would look at an annual $3,400 fee as just another miniscule expense. But a lot of those old school second homeowners will look at it as a giant burden that would add up to $34K over the next 10 years. I get that their equity has grown significantly but it hurts getting whacked with a 2X4 across the forehead every year by what you thought was your family.

Personally, I like many second homeowners in the valley, including the post-Covid ones, because they love this place. They embrace the community and the fact that their kids can wander here without big city supervision. They like the easy access to trails and the opportunity to mingle at Alpenglow and Music on the Mountain. They like the parks, the fishing and the locally owned shops. There is a real appreciation for the culture and the vibe of our small town. Yeah, there are obviously some that feel their elite credit card entitles them to act like a jerk and not treat the waitron as an equal member of the community, but that is still mostly rare. I frankly appreciate that they contribute to the community and aren’t here all the time so it’s not super busy in May or October.

My concern is that the empty home tax could act as an accelerant toward something that might seem inevitable. It could hasten the move for even more wealthy extractors to buy into town as opposed to holding on to long-term part-timers that have been here and understand us. I would not be surprised to see some long-termers seriously consider selling their houses, and they would likely be sold to someone with an eight- or nine-figure portfolio and elite credit card instead of someone from CB South hoping to move back up-valley. I could see the move quickening the transition from a small town with part-timers who understand the uniqueness of CB, to a typical resort town with less engaged second homeowner types. Just a thought…

So, what if the council looked to spread out that potential $1.5 million in desired new revenue for maintenance costs and capital projects among more people, including those like me living outside town?

Council and staff determined the idea of a seasonal sales tax was too complicated and some on the council wanted to get away from the primary town revenue source of sales tax. But we are what we are, and we are a resort community that depends on sales tax.

So, maybe a small sales tax that hits people like me that don’t live in CB but uses its amenities should be seriously considered. I would be okay contributing to the long-term financial health of CB and it just feels fairer and more spread out if we all contribute another $100 a year instead of some neighbors being tagged for thousands of dollars. I would prefer if it was earmarked for something specific like road and transit systems, or a “Good-Deed” program to create a secondary and limited “free market” for locals living here year-round, instead of general capital but there is potential to get buy-in from the broad community. The fact that the tax could go to general capital instead of something specific gives me pause. Will the money be used for filling potholes or to develop a geothermal field where all single-use plastic is buried and used as renewable fuel? I also know more than a few people who would be fine with more potholes and less amenities and sophisticated climate mitigation.

Like last time this came to the voters, I believe it does accelerate the already soft division between locals and part-timers. As I’ve said for decades, the valley exists as a three-legged stool made up of locals, tourists and second homeowners. When in balance, it allows each leg of the stool to benefit from what this place offers. Purposefully sawing into one of the legs tilts the stool and could more quickly turn us into every resort USA.

The town is not in a financial crisis right now. The mayor has made clear the town has enough money in the bank to pay for the marshal’s office and Jerry’s Gym renovations along with some deferred capital maintenance but not much else for a while. That’s not a bad spot to be in. While the state is running out of money to help pay for the marshal’s office, the MetRec board could likely help contribute to Jerry’s Gym. The idea of spending millions to turn the old fire station into a community hub can probably wait. And then hopefully, the magnet at 9,000 feet in the Rocky Mountains where the high temps in summer are usually in the 70s instead of the 100s continues to attract seasonal people and those that appreciate a small village at the end of the road.

The bottom line is that while having the hard conversation about the town’s long-term financial situation is valid, there is not (yet) any crisis that needs a tourniquet right now. Given the overwhelming results in this poll that will be discussed next Monday, it should surprise no one that the council will likely act to put a second home tax on the ballot and probably feel confident it will pass. That’s the easy step to close a growing financial gap looming on the town’s horizon, but I’m not sure it’s the right step.

The final details will indeed be interesting…

—Mark Reaman