Wednesday, September 8, 2004

Hailey may seek local option tax

Revenue would offset tourism impacts on city services

Express Staff Writer

Hailey city leaders are mulling the possibility of requesting a local option tax to offset the costs of the city?s growing expenses, but the issue would have to be settled by a vote by residents.

The Hailey City Council addressed the possibility of promoting a LOT?typically called a ?bed tax,? although the tax also is often applied toward restaurant and liquor sales in many resort communities?at a goal setting meeting last month. The Hailey Chamber of Commerce currently is assessing a survey it conducted of Hailey businesses to test whether support warrants an all out campaign.

The benefit of a LOT tax is that it helps to offset the impacts from tourism on city services and infrastructure, especially police and fire services, said Hailey Mayor Susan McBryant.

?Our tax base doesn?t support that,? McBryant said. ?You?d be able to do a better job with (the LOT) in place.?

McBryant added that the tax is discretionary, and can be focused solely on tourist-based markets like restaurants and hotel rooms.

With a population of about 6,200 residents, the city qualifies as a community that could have a local option tax, said Chamber Executive Director Tom Smith.

Cities must have a population under 10,000 inhabitants to be able to bring such a measure to a vote. Instating a LOT requires a super-majority, 60 percent of the vote to be enacted. The tax could be as high as 3 percent.

Smith said his counterpart from McCall, Tracy Smith, has been invited to come to Hailey to speak about her resort community?s experience campaigning for the tax.

Smith has not yet responded to the Hailey City Council with a final report on its survey of business feedback on the issue.

?If there is support for the taxes, then the council puts the plan together,? said Hailey City Council President Rick Davis. ?We have to decide whether this is what we want to do and what we want to collect it from.?

A ballot measure would have to clarify that the areas of the city economy considered for taxation are in part tourist driven.

Ketchum and Sun Valley both use LOTs to apply an extra tax on lodging, alcohol and restaurant sales. Ketchum also has an extra tax on building materials. Hailey could consider the same options, and could also include groceries on the list.

?The (Idaho State) Legislature pretty much leaves it up to the individual cities to decide,? Smith said.

Before the council makes any decisions as a body, however, McBryant recommended that it hold some public meetings on the issue, which will be scheduled after the council hears from the chamber.

City staff prepared an election calendar schedule for LOT consideration. A vote is unlikely to be organized for the November election since the council has not discussed the time frame yet. There is time for all steps towards such an effort to be organized for a vote in February or May.

Taking the proposal to the voters requires a great deal of energy but it can be beneficial to the community, Smith said. ?It is a huge campaign to do that. We are still trying to test the waters to see if we can do that.?

Details about LOT taxes in Ketchum and Sun Valley are available on the Sun Valley Ketchum Chamber & Visitor Bureau Web site at www.visit

Of the $2.2 million Ketchum received in LOT taxes in fiscal year 2001-2002, visitors paid 68 percent of the LOT, said Ellen Gillespie, a chamber staffer. In Sun Valley, visitors pay 95 percent of the LOT.

The money is used in part for promotion by the chamber, city infrastructure and extra police and fire protection for events like Wagon Days, Gillespie said.

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