On Nov. 3, Hailey voters will decide whether to extend the term for collecting the city's local option tax, or "tourist tax," as it is called, for another 20 years.
Hailey collects 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. Since the assessments were implemented in July 2006, the city has collected some $1.68 million in local option taxes.
If the initiative fails, the city could lose a source of revenue that has paid for lighted pedestrian crosswalks, a city snowblower, a police patrolman position and marketing funds for the Hailey Chamber of Commerce.
Councilwoman Martha Burke is one of the city officials who think the LOT is too important to lose. She hopes voters will extend the tax term before the city's population passes the 10,000 mark.
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. Recent estimates indicate that Hailey's population is about 8,500.
"It is one of the diverse funding mechanisms that the city can depend upon to solve and handle our fiscal responsibilities," Burke said. "Without it we are going to be devastated."
By state law, passage of the initiative will require approval by 60 percent of voters turning out. If the initiative is successful, tourists and locals who spend at the LOT-taxable businesses will continue paying the tax for up to 20 more years.
Not everyone is happy about that prospect.
"My initial thought is that the LOT on food and liquor by the drink in the city of Hailey is an excess tax on local residents," wrote Wiseguy Pizza Pie co-owner Sarah Heiden in a letter to the Hailey City Council earlier this month. " ... It is apparent in our business that this tax on food and liquor by the drink is falling on local diners."
Nonetheless, city officials maintain that the tax is key to providing costly public services that offset the impacts of numerous visitors coming to the city.
Voters or the City Council could repeal the LOT at any time within its term.
The Hailey polls will be open on Tuesday, Nov. 3, from 8 a.m. to 8 p.m., upstairs in Hailey City Hall.
Tony Evans: tevans@mtexpress.com
