For the week of December 23 thru December 29, 1998  

Don’t kill the goose


Killing the golden goose is never a good idea. In Sun Valley and Ketchum, the loss of the golden local-option tax eggs would hurt—a lot.

With the approval of voters in November, the city of Sun Valley increased its local-option sales tax to 3%, an increase of 1%.

Now Sun Valley shopkeepers are upset the city didn’t consult them before it decided to put a local option sales tax increase before voters in November.

It’s understandable. Everyone likes to impose taxes on someone else. Everyone likes someone else to collect the taxes they spend.

Had the shopkeepers been formally consulted, the increase may not have gone on the November ballot at all. The city posted the standard notices announcing the proposed tax increase, but held no publicly noticed hearing on the matter. It rushed the tax to the ballot with little fanfare.

The city met the letter of the law, but not the spirit. There should have been more discussion.

When the shopkeepers brought their complaints to a special meeting last week, the Sun Valley City Council gave them the cold shoulder. The council refused to delay implementation of the higher tax. Their explanation? Voters approved the tax; the city needs money and the total tax is not out of line with other resort areas including Park City, Utah at 10% and Whistler/Blackcomb, B.C. It’s just out of line with Ketchum.

The fact that the Canadian dollar is about half the value of the U.S. dollar didn’t seem to bother the council.

Sun Valley’s new state and local sales tax totals are 8% on general merchandise and liquor, and 10% on rooms.

In Ketchum the state and local sales tax total is 6% on general merchandise, 7% on liquor and 9% on rooms.

One or two percent doesn’t sound like a lot until it’s applied to big ticket items or to group convention sales. Then, it can affect sales.

The city’s argument would be stronger were it not talking about paying cash for a major street improvement program instead of bonding like most other cities. It will save money for all taxpayers in the long run, but saving it by penalizing businesses is foolish.

Until now, the resort cities sales tax has been perceived as a fair tax. It helps pay for the extraordinary demands made on public services by seasonal influxes of visitors. That’s why it has received widespread support.

The city of Sun Valley should not take the tax for granted. It needs to mend its fences with Sun Valley shopkeepers, and the owners of the Elkhorn and Sun Valley resorts. It should not risk letting the Idaho Legislature slaughter the golden goose. The city may find the Legislature only too happy to chasten the land of the rich and famous.

 

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