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Published on Sunday, December 10, 2006

Gazette Opinion: At last, a new resort for local government support
December 10, 2006

What could a resort tax do for Billings and Yellowstone County?

It could help make capital improvements at MetraPark. It could be invested in city parks. Resort-tax funds could fix streets frequented by residents and visitors. Resort-tax revenues would reduce the city or county property-tax levy.

The Billings Area Chamber of Commerce, Billings City Council and Yellowstone County Commission have endorsed changing the state's resort-tax statute to allow citizens in a city of any size to enact such a tax.

The chamber "supports the removal of resort-tax limitations to allow for all communities in Montana to determine whether or not they want to implement this tax, and for what purposes within their communities or area. The tax should have local voted authorization and should be used only in the community in which it is generated."

President John Brewer said the chamber has favored a statewide sales tax but notes a lack of progress on that issue over the past 20 years. In discussions with chamber committees, a consensus was reached that tweaking the resort tax is a place to start. In communities that have enacted resort taxes, the benefits of the revenues have increased local support for the taxes, he said, noting that the margin of voter support for the Whitefish tax was substantially higher for its renewal than for its initial implementation.

"Once people have been exposed to the resort tax, they support it," Brewer said. "We would like other communities (with populations over 5,500) to have that choice."

Brewer hopes that a change in the resort-tax law could ultimately lead to reform of the state tax structure.

Sen. Kim Gillan, D-Billings, has requested a bill draft to remove the population cap from the resort-tax statute.

"This would open the door to Billings to take it to the voters," Gillan said last week.

"I would be extremely surprised if a majority of legislators would support that," said Rep. Michael Lange, R-Billings, House majority leader. Rural legislators whose constituents shop in Billings don't see a benefit to their constituents, Lange said. He said local option taxes are more an issue of rural vs. urban interests. And rural legislators have the most votes, Lange said.

A better course of action would be overall tax reform, Lange said. He expects a bill covering statewide sales, property and other taxes will be introduced, but he's "not sure legislators have the will to do tax reform."

It's time to bust the myth that supporting cities helps only cities. In fact, the county surrounding an urban center - as well as counties surrounding that county - benefit richly from urban economic development.

Economist Larry Swanson, director of the Center for the Rocky Mountain West in Missoula, has described Montana cities as "economic engines." Using data from the U.S. Department of Commerce, Swanson has calculated that labor earnings generated by jobs in Montana's seven largest cities are "increasingly spilling into the households of persons living in surrounding counties." In 2004, $332 million in income generated by jobs in urban counties went to people residing outside those counties, mostly to nearby counties. This sharing of economic wealth has accelerated from $215 million in 1997 and $123 million in 1990.

The Legislature should give local voters the option of enacting a resort tax. Those communities that have voted for such a tax have benefited tremendously. West Yellowstone's resort taxes have made possible street improvements and public services. Red Lodge is using its resort-tax revenues for building infrastructure.

All Yellowstone County legislators are called on to make local resort-tax authority a legislative priority. The entire county delegation must work with legislative colleagues to make this happen. As Sen. Lynda Moss, D-Billings, said, legislators must be "committed to providing the resources necessary for Billings and other cities to thrive."

Copyright © The Billings Gazette, a division of Lee Enterprises.


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your city sure thinks wrote on December 10, 2006 3:39 AM
that you have a lot of money to spend on taxes, after all they just got from you with thier threats now they want a back door sales tax.
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HDrider wrote on December 10, 2006 8:24 AM
Billings is smart enough to make the right choice. The state should let us vote on a local option tax.
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No thanks,.... wrote on December 10, 2006 8:37 AM
while that tourist might pay a resort tax for a day or two, as a resident here, I will be paying it 365 days a year. Ask Red Lodge citizens what they think of their resort tax. This is just another way to collect more money for the appetites of certain people in city hall. No amount of money is ever enough.
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HDrider wrote on December 10, 2006 9:13 AM
No thanks,.... , ask Red Lodgers? They LOVE the resort tax. Seen how much infrastructure improvement has been going on up there lately? I have. Oh, and they really like the property tax break they get each year too.
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Kim Gillan wrote on December 10, 2006 9:53 AM
There is a minimum 5% property tax relief included in the existing resort tax legislation. This can be increased, depending upon what the local voters want. Also this initiative is subject to a vote; the tax is for a specified time frame. Thanks.
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No, No, No wrote on December 10, 2006 10:29 AM
The liberals of Billings (including the Gazette) won’t be satisfied until taxes eat up 100% of the community’s income. NO, NO, NO to any more taxes. It is inconceivable to think that the Chamber of Commerce would support this tax. I thought the Chamber was supposed to help business in our community, not make it more expensive for them to operate. Business owners would be stuck with collecting the tax and handing it over to the city. This is just another service the city would expect businesses to do for free.
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Tea Party anyone? wrote on December 10, 2006 10:36 AM
We need another article concerning the "special interest" groups who will be exempt from all state sales taxes. I know that the sales tax has been defeated at the polls several times because too many people in Montana will not have to pay it. Sales tax would be one more unfair tax imposed on middle-class working people.
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GB wrote on December 10, 2006 11:42 AM
No, No, No, maybe the Chamber of Commerce know something you dont...
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Grumpy wrote on December 10, 2006 12:20 PM
I'm for it as long as included is a tax on revenue from "luxury" items advertised in the Gazette. I am sick of the Gazette telling me what I MUST do. Put up or shut up.
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Eric R. wrote on December 10, 2006 2:37 PM
No more taxes.
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Thrilled! wrote on December 10, 2006 5:56 PM
Has there EVER been a tax increase that the Gazette didn't support? Maybe they should change the name of the paper to Pravda. While we are talking about taxes, I'm looking for 15,000 people to sign a petition placing a levy item on an upcoming election ballot to fund my Fruit and Vegetable MegaMart. Even though it will be a new tax, the Megamart really will be good for Billings and ultimately will cost the taxpayer less than the safety levy, Cobb field OR the sales tax. All in all a great plan, and one I'm sure the Gazette will endorse as soon as its placed on the ballot.
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Resort tax facts
Under Montana law, resort taxes:
• Can only be enacted by a vote of the people in the place where the tax would be collected.
• Cannot exceed 3 percent.
• Cannot be enacted in cities with populations more than 5,500.
• Are limited to communities that derive the "primary portion of its economic well-being" from businesses catering to travelers.
• Are limited to retail sales of lodging, restaurants, bars, destination recreation (ski) resorts and establishments that sell "luxury goods." Local voters decide what constitutes luxury goods, but the law says that can't include unprepared or unserved food, medicine, medical supplies or services, appliances, hardware, tools or any "necessities of life."

Local option revenues
How much would a local option tax raise?
Sen. Lynda Moss, D-Billings, asked the Montana Department of Revenue to research that question. Estimates based on the U.S. Census Bureau's 2002 Economic Census with future years' growth extrapolated show that a 3 percent resort tax covering only lodging, restaurants and bars would generate about $12.75 million in Yellowstone County in 2009. Such a tax would generate $11.52 million in Gallatin County and $5.16 million in Cascade County.
By contrast, a 3 percent general sales tax covering a broad range of retail goods and services would raise an estimated $62.68 million in 2009 in Yellowstone County and $38.22 million in Gallatin.
These estimates don't exclude costs of collecting the tax and are based on a countywide levy. The revenue would be less if, for example, it applied only in the city of Billings.

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