Growth takes center stage
“I don’t see it as a tax on the construction industry. I see it as a tax on growth,” he said Tuesday as the council voted 4-3 to put this question to the people.
Mayor Judy Yoder, making the same observation, broke a tie to make this a ballot issue. Let Avon’s constituents decide this one, packed as it is with philosophical points.
Arguments about “hurting” developers and builders with use taxes on supplies they buy for construction and with impact fees to fund critical infrastructure that otherwise municipalities must just suck up are always interesting in a county noted in the 2000 census as the third fastest growing one in the entire country. We had a pause since the turn of the millennium, to a more stately 3 percent annual rate, but that’s likely to change back to the surge. You don’t need to look much further than the dirt flying at The Village at Avon and the Berry Creek 5th work sites, or the jobs about to come on line at the Ritz-Carlton in Bachelor’s Gulch and the county’s first “big boxes” when they are completed.
The course is set for the town of Avon’s population to roughly double, along with the expansion of the town boundaries.
Hurt the developer? Are you kidding? Eagle County has been a veritable Mecca for builders for decades now, and at least for a decade or more to come. Imposing a 4 percent use tax on the purchase of building supplies, thereby joining the ranks of most municipalities in Colorado with similar taxes, will hardly prove crippling.
Oh, they’ll fuss and then they’ll pass just as much of the cost to their customers as possible. Only the ones who perhaps are over their heads will think twice about it. And a lot of us are starting to think that developers who think twice about adding to this area’s incredible growth rate may not really be such a bad thing.
Housing isn’t exactly cheap as a result of builders enjoying relatively easy going with the High Country governments over the years. The joke among some observers is that Eagle is known as the county that couldn’t say no. It’s not entirely a fair assessment, at least not if your name happens to be Fred Kummer, who has been trying for three decades to build something, anything, on his land in the Brush Creek Valley. But this isn’t the third fastest growing county in America for nothing, either.
Avon, like its upvalley cousin Vail, is feeling the pain of low sales tax revenue, upon which both towns have made themselves dependent. It was a great way to keep property taxes lower, and to run the town on the spending of the tourists. Perfect. But sales tax revenue has gone flat, for years now, and lo and behold it’s awfully vulnerable to the many moods of the economy.
The use tax is a form of sales tax, and subject to the same problem over time. It’s also a little complicated, with calculations of the cost of construction, divided by two and that amount taxed 4 percent, followed by receipts that exempt the builder from the local sales tax of the area where the builder bought the stuff. Got it? Good.
It’s also a little odd that the user tax revenue would be earmarked for Avon’s free bus fleet, which is hemorrhaging because the ridership does not support it.
Still, there are plenty of good ways to use this funding, and voters may want to tap this source while making a statement about contributors to Eagle County’s, and Avon’s rapid growth.
We’re not sure that this drop of water in the bucket does more than put off that inevitable discussion about the property tax as a more stable income source for municipal services. But it seems growth is the operative concept here, at least politically speaking.