For the week of November 6 - 12, 2002

Chamber members frown on LOT increase

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By GREG STAHL
Express Staff Writer

Raising Ketchum’s local option tax by 1 percent is not proving to be a popular idea.

In light of a soft economic environment nationwide, the majority of business owners responding to a recent Sun Valley-Ketchum Chamber and Visitors Bureau survey said they are very hesitant to support any increase in the local option tax in Ketchum.

Mayor Ed Simon suggested the increase earlier this year as a means for the city to purchase land, but he did not specify potential uses for that land.

The voter-approved sales tax is a levy allowed only in Idaho’s resort communities. In Ketchum, the LOT totals 1 percent on retail sales, 2 percent on lodging, 2 percent on liquor by-the-drink and 1 percent on building materials.

The city of Sun Valley has a separate, 3 percent local option sales tax on lodging, liquor and retail sales. On a ballot measure Tuesday, Sun Valley citizens were asked to extend the tax through 2010. Any increase in Ketchum also would need voter approval.

Ketchum collects nearly $2 million in LOT annually, and visitors to the area pay approximately 68 percent of the tax, according to a 2001 Blaine County economic study.

Of the approximately 600 member businesses that were mailed surveys, 64 responded, and, of those, 71 percent did not approve of the proposed 1 percent increase. Another 28 percent of the respondents favored the increase.

Most of those who did not approve of the increase are those directly affected by the tax, CVB Executive Director Carol Waller said.

"Many respondents wrote in specific comments regarding their positions, and, not surprisingly, some of those opinions were quite different," Waller said. "However, the most common sentiment was that increasing the tax now would have a very negative impact on the local business environment and economy, especially since the Idaho state Legislature is considering raising the state sales tax to make up for budget shortfalls this next year."

Many of those who responded also said they were concerned that no specific purpose has been identified for the additional revenue the city would collect.

"The need for generating additional income for the city was not perceived as critical," Waller said.

Waller said the 11 percent response to the survey is considered good, but Ketchum City Councilman Maurice Charlat questioned whether the study’s results are predictable.

Acknowledging that the will of the area’s business owners was very clear in the survey results, Charlat said he is still "relatively convinced" that the city would vote to increase the tax for a limited time for the right project.

Anonymous survey comments match Charlat’s observation.

"I don’t support it, because I don’t know where we (the mayor and city council) are going to spend the additional revenue," one respondent said.

Other comments indicated that parks, affordable housing or Warm Springs Golf Course preservation could be acceptable expenditures if a 1-percent increase were approved.

"Before it is possible to consider this proposal, the city should explain what the land acquisition is for, why this is the best use for a LOT increase, and what the projected impact would be on the Ketchum economy and businesses, given that we are already in a recession!" another respondent wrote. "How could we possibly vote on such a proposal without the basic information?"

 

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