Hailey City Council members reviewed Monday a preliminary draft of a proposed local option tax ordinance that city residents will likely vote on in the May 23 elections.
Approval of the LOT ordinance will require an endorsement from at least a 60 percent majority of Hailey voters. The stated purpose of the proposed LOT ordinance is to help offset the impact tourists have on the city.
During Monday's discussion of the draft ordinance, City Council members clarified their vision for the finalized draft ordinance. Specifically, council members considered and then rejected proposals to include taxable items such as jet fuel and catering services in the ordinance.
The council also discussed whether the city should ask voters to approve a 30-year duration for the LOT rather than the far shorter four-year duration recommended in 2005 by an ad-hoc committee set up by Mayor Susan McBryant.
Jim Spinelli, the executive director of the Hailey Chamber of Commerce and a member of the ad-hoc committee, said committee members recommended the shorter term because they felt it would be more feasible.
"We wanted to make it as palatable as possible," Spinelli said.
In the end, council members agreed with Spinelli's assessment on the duration question.
"I think it's a very honest approach to go for four years," Councilwoman Carol Brown said.
The council and the mayor also discussed where revenues from the ordinance should be directed if voters approve the LOT.
As the draft ordinance is currently written, monies collected under the LOT ordinance would be used for funding emergency services, parks maintenance and services improvements, road repair and snow removal, the marketing of Hailey and other city improvements.
If approved by Hailey voters, the city would collect the following taxes under the LOT ordinance:
· A rental-vehicle tax of 3 percent.
· A hotel and motel room occupancy tax of 3 percent.
· A liquor-by-the-drink tax of 2 percent.
· A restaurant food tax of 1 percent.
McBryant asked the council to consider adding stronger language specifying that money for the marketing of the city should be earmarked for use by the Hailey Chamber of Commerce.
"So they can market the businesses that are the recipients of these tourist dollars," she said.
In the past, city officials have discussed other sources of tax revenue such as building supplies and retail beer and wine, but have rejected those sources of income because they were deemed too burdensome on Hailey residents.
For the LOT to go to a vote on May 23, the City Council will have to approve the final form of the LOT ordinance by their next meeting on April 10.
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Proposed LOT collections
If approved by Hailey voters, the city would collect the following taxes under a local option tax ordinance:
· A rental-vehicle tax of 3 percent.
· A hotel and motel room occupancy tax of 3 percent.
· A liquor-by-the-drink tax of 2 percent.
· A restaurant food tax of 1 percent.
