Wednesday, May 17, 2006

To tax or not to tax?

Hailey votes Tuesday on local option tax request

Jim Spinelli


Hailey residents will vote Tuesday, May 23, on a separate ballot requesting a local option tax ordinance put forth by the city of Hailey.

Hailey officials say funds generated by the proposed LOT would be used to help pay for a variety of much-needed city projects and services and for the promotion of the city as a tourist destination.

Estimated yearly revenues from the LOT ordinance, which requires a 60 percent majority vote for approval, are $326,250. As the ordinance is drafted, the duration of the LOT would last for four years.

Proposed LOTs

If approved by voters, Hailey will collect the following local option taxes:

· A rental-vehicle tax of 3 percent.

· A hotel- and motel-room tax of 3 percent.

· A liquor-by-the-drink tax of 2 percent.

· A restaurant tax of 1 percent.

How will money be spent?

Revenues from the proposed LOTs (as specified by the city) would be used for:

· Various emergency services.

· Maintenance, improvement and acquisition of parks.

· Road repair, transportation enhancements and snow removal.

· City promotion, visitor information, special events and economic development.

· Town improvements: library modernization, sidewalks, town square, etc.

· Public transit and related improvements.

· Direct cost to administer and enforce the LOT ordinance.


LOT would overcome budget shortfalls

Executive Director, Hailey Chamber of Commerce

There are a couple of reasons why Hailey needs a Local Option Tax (LOT). We have a shortcoming in our annual budget that is obvious in park maintenance, rescue services (fire and police), road maintenance, library, mass transit and financial support to the Chamber of Commerce for city and merchant promotion.

Why do we have this disparity? We have seen tremendous growth and expansion in the last 10 years. More and more tourists have discovered Hailey. More and more second homeowners have arrived. These folks use the services I have listed but do not pay for them. They are a strain on our infrastructure, but are very valuable to our economy. But the real reason we have this budget problem is that the State of Idaho limits the municipality's annual budget increase to only 3% per year. Do the math compared to use and growth!

So how do we fix it? The least intrusive way is a LOT, which is primarily focused on tourists and visitors. The proposal is 3% on beds, 3% on auto rentals, 2% on restaurant food, and 1% on liquor by the drink. This will generate approximately $350,000 per year. Could we use another policeman, paid firefighters, better snow removal, sidewalks, increased library services, mass transit?

The only concern I am hearing is with the restaurants because a lot of locals visit them. Remember, this is a pass-through tax where the restaurants collect the tax, and write a check back to the city. The restaurants aren't taxed, but they have to do a little bit of bookkeeping. I think that is a small contribution on their part to help improve our quality of life. And think about it, $1 tax on $100 dinner! And the money comes back to the city.

So, please turn out and vote on May 23, and vote yes for the Hailey Local Option Tax.

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