Friday, September 15, 2006

Jail sales tax was good idea

Guest opinion by Bob Kaplan

Bob Kaplan, a resident of Ketchum for 15 years, is a former professor of economics at University of Vermont.

Unaccustomed as I am to writing editorials, I believe it imperative to express my disappointment that the proposal for financing a new public safety building, put forth by Sheriff Walt Femling, was turned down by the county commissioners.

An increase of one half of 1 percent sales tax has been estimated to raise $24 million over a 10 year period. It was proposed that half of this amount would pay for the new building, plus interest, and the other half would be used for property tax relief in Blaine County. I thought this was an exceptionally good idea.

There is no question that the new building is needed. The issue is how to pay for it. By using an increase in the "consumption" tax rather than an increase in the property tax (as is now being proposed by the county), the burden would be less on the residents of Blaine County.

Also, a consideration regarding the property tax proposal is that it will likely be turned down again by the voters given the present distress over our high property taxes. Further, we already have a housing crisis due to the high cost of housing, and a further increase in property taxes would exacerbate that situation. I know of people who have had to sell their houses as they can no longer afford to pay the high property taxes. These people have lived in their homes for many years and through no fault of their own, but rather through market forces and other peoples choices to build larger, more expensive houses in the area, the value of their properties—and thus their taxes—have gone up considerably.

That may be a mixed blessing. But the reality is that if they want to continue living there, they must pay much higher property taxes. This impacts rental residences, too. If landlords have to pay more in property taxes, then they will raise the rents to cover this increase. In a county that is struggling to alleviate the high cost of housing for many of the hard-working residents, financing a necessary public building by increasing property taxes is not congruent with the county's objectives.

If, on the other hand, the proposed new jail is paid for out of an increase in the sales tax, our part-time residents and visitors will help pay part of the burden. And I don't think that such a small increase in the cost of goods would be a deterrent to their visits. Also, a lot of spending is discretionary and thus the payment of this tax would be by choice and not mandatory.

If the county commissioners believe the increase in the sales tax places too much of a hardship on the residents, this tax could be refined further by exempting grocery sales and perhaps even children's clothing. I think this sales tax increase would be a lot more palatable than the property tax increase. If I were a politician, I certainly know which one I would choose.

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