Ketchum will not ask voters to approve an increase of the local-option-tax rate for hotels, motels and short-term rentals from 2 to 3 percent.
The City Council decided Tuesday to not try for Mayor Randy Hall's proposed tax increase. Hall put forth the initiative to provide a predicted $56,000 in additional revenue that would be used to reach $400,000 in funding for a new marketing effort by Sun Valley Resort Area Marketing. The city already has $375,000 available for the marketing board, $275,000 of which previously went to the Sun Valley-Ketchum Chamber & Visitors Bureau and $100,000 in annexation fees from Sun Valley Resort's planned River Run base village.
Alan Pennay, owner of by-the-night condo rental Pennay's at River Run, was one of three lodging owners fighting the tax increase, and said this one sector shouldn't be made responsible for something—marketing of the Sun Valley area—that would benefit all businesses.
"By raising it 1 percent, we're actually raising LOT 50 percent," Pennay said.
State law allows local governments to impose a maximum 3 percent lodging LOT, something both Hailey and Sun Valley do.
After hearing from Pennay and the others, council members decided it would be unfair to just charge hotels and didn't even vote on the issue.
City Administrator Gary Marks said the money for the marketing board could come from $130,000 put into the LOT fund this spring to cover an expected shortfall in LOT collections for the year. As it turns out, the gap won't be as wide as expected. Council members asked Marks to look into how much money would be available.
Trevon Milliard: tmilliard@mtexpress.com
