The Hailey City Council on Monday agreed to begin the lengthy process of preparing to put before voters a proposal that the city adopt a local option tax on certain goods and services. A citywide vote on the matter has been tentatively set for May 2006.
The mayor and the council had entertained placing the LOT vote on the ballot for an election in February, but decided that would be too soon and wouldn't provide the city enough time to properly prepare for the vote, City Council President Rick Davis said.
"We need more time than that," Davis said.
Funds from local option taxes are used by resort-area municipalities to help offset the impacts tourists have on city services, such as roads and sidewalks, Davis said.
"They usually call it a bed and booze tax," he said.
Ketchum and Sun Valley already employ LOTs on various products and services, including lodging, retail items and liquor by the drink.
Among other details, the Hailey City Council will have to first decide what tourist-related services to tax and at what percentage, Davis said.
"We're all in agreement that we want to see this happen," he said. "As is the chamber of commerce."
Davis said the LOT funds could be given to the chamber of commerce for a marketing campaign for the city, to the Public Works Department for the maintenance of sidewalks and roads or to the Fire Department. "It could be allocated in a lot of ways," he said.
Davis said at least some of the funds should be devoted to the Hailey Parks and Lands Department.
"That's the one that has the least amount of money in the budget," he said.
Passage of the LOT would require a two-thirds majority, Davis said.
Convincing Hailey residents to vote for the LOT proposal will be "an educational process," he said.
Businesses won't feel an impact from the tax, as it will be passed on to the tourists, Davis said. "It isn't going to affect their bottom line," he said.
Davis said the city will be holding a public workshop on Jan. 2, 2006, to discuss ideas for the LOT.
