Friday, September 18, 2009

Hailey LOT down 14 percent

Fall ballot initiative could extend revenue for 20 years

Express Staff Writer

The city of Hailey's monthly treasury report states that local option tax revenue was down last month by 14 percent compared to August 2008. With one month to go in the fiscal year, city officials expect LOT revenue to be $320,000, down 18 percent from last year, marking a drop of $58,700 from fiscal year 2007-08.

Nevertheless, LOT has become an important source of revenue for the city. If a fall ballot initiative succeeds in November, the city will extend the LOT for another 20 years.

Since July 2006, the city has collected $1.68 million from local option taxes on by-the-drink liquor sales, restaurant food, car rentals and hotel rooms.

Over the past 11 months, the LOT revenue changes have fluctuated from a November high, up 3 percent from the previous year, to an April low of 35 percent down.

Hailey collects the following local option taxes: a rental vehicle tax of 3 percent, a hotel 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.

In its budget calculations for fiscal 2009-10, the city estimated an LOT revenue loss of $65,000 due to the recession. As a result, the city was poised to lose one police officer, though that position was retained this week due to a grant from the federal stimulus package.

City Administrator Heather Dawson said projected LOT revenue for October, the last month of the fiscal year, will be down about 12 percent, leaving the city $40,000 under budget for the year.

When the city's population exceeds 10,000, the city's LOT 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 current population of Hailey is about 8,500.

The Hailey City Council hopes to extend its local option tax for another 20 years through passage of a ballot initiative on Nov. 3. Sixty percent of voters turning out will have to vote for the initiative for it to pass.

· In other Hailey news, the City Council voted to change the zoning on the east side of Third Avenue between the National Guard Armory and Hailey Elementary School from General Residential to Limited Business, in part to accommodate construction of a Technology Department building for the Blaine County School District.

Tony Evans:

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