Following passage of a 1 percent increase to local option taxes in Hailey and Ketchum to subsidize commercial air service, those cities and Sun Valley will need to decide how to choose representatives to serve on a Sun Valley Air Service Board that will spend the $2 million estimated to be collected by the tax each year.
The issue was on the Sun Valley City Council agenda for Thursday, Nov. 7, and is on the Ketchum City Council agenda for Monday, Nov. 18. Hailey Mayor Fritz Haemmerle said Thursday that his city had not yet decided when to address the issue.
By state law, any increase to local option taxes must receive 60 percent voter approval. The ballot measure received 66 percent approval in Hailey and 64 percent approval in Ketchum. It was passed by Sun Valley voters last year contingent upon passage by Ketchum voters.
“I’m enthusiastic about getting it settled,” Sun Valley Mayor Dewayne Briscoe said. “It’s time to start collecting the tax and improving our air service.”
The additional 1 percent tax will be added to existing LOT collections in the three cities beginning Jan. 1. Added to existing local option taxes, a 6 percent state sales tax and a 2 percent state lodging tax, passage of the additional 1 percent LOT will result in sales taxes of between 6 and 12 percent in the Wood River Valley.
Before the election last year, when the ballot measures failed to obtain the needed margins in Hailey and Ketchum, the cities and Blaine County signed an agreement that created the Air Service Board. Voting power on the board is to be proportional to the amount of money collected in each city. The county will not have a voting seat, but a representative will sit in an advisory capacity due to the county’s status as an airport owner. The agreement does not specify how each city is to choose its representative.
Eric Seder, president of the nonprofit Fly Sun Valley Alliance, which works to promote commercial air service to Friedman Memorial Airport, said his organization will work with the Sun Valley Marketing Alliance to develop a spending plan to present to the board once it meets.
Seder said one likely use for the money will be to provide a minimum-revenue guarantee to United Airlines for service between the Wood River Valley and a city yet to be chosen that will provide a connection for flights to the East Coast. In late September, Friedman Airport was awarded a $500,000 federal grant to jump-start the service for one year. If all goes as planned, the new service will begin in summer or winter 2014.
“Now we can feel confident that we’re not asking an airline to implement a whole new operation without money to pay for it for more than one year,” Seder said.
Fly Sun Valley Alliance and Sun Valley Co. already provide a minimum-revenue guarantee for Horizon Air’s nonstop service between Sun Valley and Los Angeles during the peak winter and summer seasons. The amount of that guarantee has not been disclosed.
Greg Moore: email@example.com