Vail voters will see sales tax hike question
If passed, funds would be dedicated to workforce housing
Vail voters in November will be asked to approve a 0.5% increase in the town’s sales tax rate. If approved, revenue from the tax — estimated at $4.3 million per year — would go to housing programs.
The Vail Town Council Tuesday unanimously approved asking voters for the tax-rate increase. Council members also put a 30-year expiration date, or sunset, on that tax, if it’s approved.
Explaining the length of the sunset period, council members said the tax should last as long as possible bonding against revenue raised by the tax.
While 30 years seems a long time, it’s a standard payment schedule for municipal bonds. It also isn’t unheard of. A voter-approved property tax for Eagle County’s open space program in 2002 originally had a 23-year sunset: until 2025. Voters in 2018 moved that sunset date to 2040.
Towns can also reduce sales tax rates. When Gypsum’s recreation center was paid off years before expected, the Gypsum Town Council in 2014 rolled back a voter-approved sales tax to build the facility.
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Vail resident Kaye Ferry lobbied hard for the sunset provision.
“At some point, we’re going to run out of space (for housing),” Ferry said, adding she didn’t want future councils to use that revenue for other purposes.
Vail workers only?
Ferry also urged the council to make sure anything built or bought with the sales tax money would be reserved only for those who work in the town of Vail.
The town spent $600,000 to buy deed restrictions on 23 units at the 6 West Apartments in Edwards. Town Attorney Matt Mire noted that those restricted units have a “cascading” deed restriction. At the top of the cascade is Town of Vail employees, followed by people who work in town. The restrictions next apply to those who work an annualized average of 30 hours per week in Eagle County. The units can then be rented short-term to others.
Vail Housing Director George Ruther said 12 of those 23 units are occupied by people who work for the town or a business in Vail.
Ruther noted that many residents of other units at 6 West work in Vail. But, he added, transportation into Vail by bus or car can be a problem. Those who can make the same amount of money at a job in Avon or Vail are likely to choose a workplace that’s easier to get to.
Resident Bob Armour asked council members whether town general fund money in use for housing could be available for other projects.
“That’s my goal,” Council Member Travis Coggin said. “I don’t know if we’ll get there in Year One.”
Vail Town Manager Scott Robson said the money raised by the sales tax won’t cover all the town’s housing needs. Robson noted that a current study will create data for a new fee structure for short-term rentals in town. Fees from those units could further free up general fund money, he said.
No marketing proposal
Voters could have seen a pair of ballot questions, but council members declined to seek a place on the ballot for a marketing and events tax. That money would have raised the current lodging tax levied by the Vail Local Marketing District.
David Feherty of Magellan Strategies did survey work on both possible ballot questions. While there’s solid support for a tax to support housing, Feherty said the marketing and events tax would be no more than a “50-50” proposition.
While the idea of that proposal was to focus more on “sustainable” tourism and event funding, council members also wondered if it is the right time to ask voters for that levy.
Mayor Dave Chapin said the idea of the marketing tax initially made sense. But, he added, “I don’t know if I’ve talked to a single person in the past two months who favored the idea. A busy summer season has many people complaining about too many people in town,” Chapin added.
“I don’t think we have too many visitors; we don’t have the workforce (to serve them),” Council Member Jenn Bruno said. “We need to take care of the people who support our businesses.”
Council Member Kim Langmaid supports efforts to build a more sustainable resort in Vail. She acknowledged that a delay in the marketing request would give town officials more time to consider and refine the current Destination Stewardship plan.
“I think with better timing and more thought (a marketing tax) would have a better chance,” she said.
A proposed 0.5% sales tax would add 50 cents to a $100 purchase.
The proposal exempts food for home consumption from the tax.
The proposal would generate about $4.3 million per year for housing.
The proposal would expire in 30 years.
The town council could cancel the tax, or voters could extend it.