For the week of  October 17 - 23, 2001

Economic barometer points downward

Option tax receipts slip

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"We have historically shown substantial increases (in local option tax revenues). This year we didn’t, and next year we may not."

- Jim Jaquet, Ketchum City Administrator

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By GREG STAHL
Express Staff Writer

Sun Valley-area business is on the decline, and it’s not just following the Sept. 11 terrorist attacks.

Option tax receipts collected by the resort cities of Sun Valley and Ketchum show year-to-date business down 4 percent in Sun Valley and up only 2 percent in Ketchum. Both cities’ collections are off considerably from last year’s budgetary projections.

September 2001 receipts, the last in the 200-2001 fiscal year, are not yet in, but they could show a dramatic further decrease from averages.

The local option tax is a state-enabled sales tax for Idaho’s resort cities. Ketchum levies 1 percent on general sales and 2 percent on lodging and liquor.

Sun Valley levies 3 percent on liquor, lodging and general sales.

For its 2000-2001 fiscal budget, the city of Ketchum projected a 15 percent increase in option tax collections. The city is up only 2 percent during the annual assessment period ending in August.

"What I’m concerned about, though I’m not losing any sleep over it, is we budgeted $2.2 million and we collected this year $1.96 million," Jaquet said. "We have historically shown substantial increases. This year we didn’t, and next year we may not."

The city’s 2001-2002 budget projects a 12 percent increase.

Jaquet said the budget has built-in contingencies, however. The city’s land acquisition and development coffer, funded by the option tax, is the largest, single option tax expenditure category.

"We don’t expend that money until we have it in hand," Jaquet said.

Sun Valley budgeted $1.45 million in option taxes in its 2000-2001 fiscal budget, but the city council approved budgetary amendments, most recently in September, reducing the projection to $1.3 million. Collections through October show $1.25 million has been collected.

Sun Valley’s 2001-2002 budget projects $1.4 million in collections, but city financial officer Lisa Hals said that number will likely be amended downward as the option tax receipts continue to fall.

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