During the city election in November, Hailey voters will have a chance to extend the city's local option tax for another 20 years. City officials are hoping a ballot initiative supporting the tax term extension will secure what they say has become an important source of revenue for the city.
Sixty percent of voters turning out will have to vote for the initiative to pass.
Since July 2006, the city has collected some $1,680,000 in local option taxes on by-the-drink liquor sales, restaurant food, car rentals and hotel rooms in the city.
Hailey collects the following local option taxes: a rental vehicle tax of 3 percent, a hotel and motel room tax of 3 percent, a by-the-drink liquor tax of 2 percent, and a restaurant food tax of 1 percent. Money collected by the city from the taxes has funded lighted pedestrian crosswalks, a city snowblower, a police patrolman position and marketing funds for the Hailey Chamber of Commerce.
But if the city's population exceeds 10,000, city officials say local option tax revenue could be lost for good. Idaho code allows resort communities with populations of less than 10,000 to collect local option taxes to help pay for the costs of hosting numerous visitors. The population of Hailey is currently about 8,500.
The City Council voted Monday to add the initiative to the fall ballot after sending letters of inquiry to business owners who collect the taxes, to judge their sentiment about extending them. City Administrator Heather Dawson told the council Monday that the business owners did not respond to the poll.
"We are taking this as acquiesence," Dawson said.
The Hailey Chamber of Commerce board of directors recommended keeping the same local option tax rates, but did not specify a preferred time period for the tax.
The LOT doubled the chamber budget for marketing the city as a tourist and shopping destination, to $75,000, in the last three years, adding a full-time position and relocating the chamber office to Main Street.
Chamber Executive Director Jim Spinelli said the expanded budget allowed the chamber to support 17 public city events, rather than the three it had previously supported.
Dawson said the city expects to spend $360,000 in LOT funds this year, down from $377,000 in fiscal year 2008-09. The city originally predicted that annual LOT returns would total some $325,000.
Tony Evans: tevans@mtexpress.com
