Tax hike needed, Vail officials say
The Vail Town Council agreed last week to place a property tax increase question onto the Nov. 7 ballot in an effort to keep the town’s budget in the black and avoid depleting the town’s cash stash for future capital projects.
Three years ago, following a decade of stagnant sales tax collections – which the town depends on it for about half of its income – Vail Town Manager Bob McLaurin rang the alarm. He said the town could no longer provide the level of services on which its residents have come to depend without running the town’s capital projects fund into the red by 2006 to the tune of about $10 million.
Council members now have decided against giving voters a list of specific projects the property tax increase – estimated to generate $2.25 million per year – would fund. Instead, they will ask voters to keep an open mind and not expect big buildings and grand projects.
The additional money, town leaders say, would be spent on maintenance of town infrastructure, focusing on fewer and only essential buildings and facilities over the next five years.
That may open the door to a third fire station or a new, consolidated one at West Meadow Drive, as well as streetscape improvements in the Vail Village and Lionshead. I would not necessarily pay for a new ice rink or a new gymnastics facility.
The proposed property tax increase, it appears, will be supported by Vail’s second-home owners, who pay close to 70 percent of Vail’s residential property tax tab.
“(We) applaud you for having to take on a very difficult project,” says Jim Lamont of the Vail Village Homeowners’ Association, the town’s dominant group of homeowners. “We would hope that people understand the funding issue and that there will be a debate there.”
Lamont says the group he represents hopes the ballot question will spark a discussion regarding “how the community needs to prioritize its spending.”
John Cogswell, a local businessman and resident, says he agrees the town needs funds to rebuild its infrastructure. But the proposed tax increase would hit him in different places, he says – some harder than others.
“As a homeowner, it doesn’t bother me; as a commercial property owner, it bothers me a bit more; and as a tenant of commercial property is bothers me even more,” he says. “But I think it is a good way to go.”
Paul Rondeau, a Vail resident and property owner, said he supports the tax increase, but only “with one rather large caveat.”
In return for more money, he says, he wants to see more accountability in the form of an annual report of actions taken to save money, as well as a list of actions that cost money and the services provided with it.
Earlier this year, council members decided to pursue new revenue sources after a decade of declining sales tax collections thinned the town’s fund balances, forcing the budget to dip into the capital projects fund in recent years to pay for increasing costs in running the town.
This year the town is spending 79 percent of its total income, or approximately $27 million, on operations, instead of using half of its total income of $34 million for operations and saving the other $17 million for capital projects. This year, only $10 million was dedicated to new projects, including streets, new buses, police cruisers and computers.
As a good-will gesture to property owners, council members have instructed McLaurin to cut $1 million out of the town’s operations budget for 2003. McLaurin is expected to return with his budget-cutting plan by Sept. 10.
Council members say they are hopeful voters will consider Vail’s existing low property-tax assessment before making their choice.
A 4 mill increase would bring the town’s levy to 48.6 mills, lower than Eagle’s 51, Gypsum’s 83 and Avon’s 59.
Still, Vail voters historically have been tough with tax increases.
Since 1973, when voters overwhelmingly put a sales tax in place, no other tax question has passed muster, ending with a failed attempt in 1993 to increase sales taxes for an additional $2.1 million in revenues. Nov. 7 will be the first time Vail voters will be asked to shoulder an increase in property taxes since they first authorized the town to levy them in 1971.
Geraldine Haldner can be reached at 949-0555, ext. 602, or at firstname.lastname@example.org.