For the week of November 14 - 20, 2001

Supreme Court hears suit against chamber funding

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By GREG MOORE
Express Staff Writer

A group of Ketchum residents suing to end city expenditures for tourism promotion encountered an obstacle during an Idaho Supreme Court hearing last week when Chief Justice Linda Copple Trout said they had suffered no distinct injury—a condition set by previous cases for standing to bring a lawsuit.

Filed by six Ketchum citizens, the suit contends that the city is prohibited by the Idaho Constitution from fulfilling its $315,000 annual contract with the Sun Valley-Ketchum Chamber of Commerce for tourism promotion. The Constitution states that no city shall "make donation" to any "company or association."

However, before those issues can be decided, the plaintiffs must show that they have the legal right to bring them to court.

The case was dismissed in Fifth District Court in March 2000 on the grounds that the plaintiffs had no standing. Judge William Hart ruled that mere status as taxpayers was not enough to show a "distinct palpable injury."

An appeal of that decision was heard by the Supreme Court on Thursday in Twin Falls. A decision is not expected for several months, but Trout’s assertion indicates that at least one justice will probably vote to uphold the dismissal.

Arguing for the plaintiffs, Hailey attorney E. Lee Schlender told the court that his clients had suffered financial loss because even though the chamber’s fee is funded by Ketchum’s local option tax, their property taxes are increased to pay for things the option tax money could be supporting if it were not going to the chamber.

"I don’t see that as a unique or distinct injury," Trout replied.

Schlender contended that his clients make up part of an injured group.

"You have two distinct classes of people (in Ketchum), those in the tourist business and those who aren’t" he said. "The reason for this law was to give relief to taxpayers of the city, not so people in the tourist business could get rich."

However, Trout contended that the only reasonably arguable injury was to those paying the option tax.

The option tax is a sales tax placed on items typically bought by tourists and is used primarily to fund the increased infrastructure required by the influx of visitors. However, a Ketchum ordinance allows the money to be used for city promotion as well.

Ketchum City Attorney Margaret Simms contended that the plaintiffs were asking for a new rule on standing to allow any taxpayer to bring a lawsuit. If that were to be granted, Simms said, "it would completely paralyze local government."

"It would be having courts making decisions on expenditures," she said.

In response, Justice Wayne Kidwell suggested the possibility of a "middle ground" on the subject.

"Why shouldn’t a group, if a large group, have access to the courts to decide grievances?" he asked.

Simms said the state attorney general’s office has the power to intervene when the public trust is clearly violated.

In his closing remarks, Schlender asked the court not to "walk away" from ruling on the substantive issues of the case—whether a local option tax is limited to funding infrastructure improvements and whether a city can subsidize private business. If the court does so, he said, "we really don’t have judicial oversight as we’re supposed to have."

In interviews, plaintiffs Craven Young and Jake Jacoby said the suit’s intent is not to reduce tourism but to make more money available for improvements to Ketchum’s infrastructure, such as roads and bridges.

Young said the city of Ketchum had ignored requests by himself and others to put a referendum before voters on whether option tax money should be spent to fund the chamber of commerce.

"That’s why it’s festering still, because the city will not sit down with its own residents and have the issue aired out."

However, a referendum was approved by 87 percent of the voters in 1997 to extend the local option tax for 15 years and to allow part of its proceeds to be used for city promotion and visitor information.

Young contended that the recent election loss by appointed Mayor David Hutchinson and an earlier loss by Councilwoman Sue Noel were the result of voter dissatisfaction with business dominance of city politics.

 

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