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Clean Water Plus Tax Relief

In April voters will choose whether to raise the tourist tax 1 point to 3 percent

By Mike Jopek

This is the best bargain I have ever heard of, said Doug Chadwick as supporters rallied to permanently protect Haskill Basin, the source for 75 percent of Whitefish’s public drinking water.

Chadwick referred, in part, to a bargain price that Whitefish would pay for a permanent and publicly accessed conservation easement on more than 3,000 acres just uphill of the municipality.

Locally, protecting Haskill Basin costs 38 cents on the dollar. The balance was secured from federal grants and landowner donations. Whitefish will ask voters to decide whether to raise the resort tax 1 percentage point to secure the remaining $8 million and close the watershed protection deal.

Whitefish is the only eligible jurisdiction in Montana that has yet to enact the full 3 percent resort tax on luxury items. Local tourist taxes cannot exceed 3 percent by state law and Whitefish’s resort designation sunsets in 10 years. A 2004 extension was approved by 76 percent of the voters.

By a 56 percent margin, voters in 1996 enacted the resort tax to collect revenues from city shoppers. It taxes more than 500,000 tourists who stay and shop in Whitefish each year, and it taxes the fewer than 5,000 voters who live in their homes.

The tax applies to items like art, bicycles, jewelry, clothing, lodging and prepared foods and beverages. It does not apply to things like groceries, medicine, furniture, automobiles, tools, or hardware like plumbing and lumber.

Since 1996 the resort tax has contributed $14.4 million to street and sidewalk repairs, $6.6 million to property tax relief, and $1.6 million to parks and merchant relief for collections.

Tourist taxes helped pay for repairs to avenues like Baker, Columbia, Central, and Colorado. The funds reconstructed streets like Seventh, Railway and East Second. On the docket are roads like Somers, Evergreen, Karrow and West Seventh.

Resort taxes improved parks like Riverside, Baker Street, Grouse Mountain, Kay Beller and Soroptimist.

In April voters will choose whether to raise the tourist tax 1 point to 3 percent, on par with other resort communities across Montana.

If voters choose to protect the watershed, property tax relief increases by 50 percent. The total property tax relief would increase to more than $10 million over the decade.

The $1 million in annual tax relief applies to all property owners in the city. Business owners on the strip or downtown get relief, homeowners in traditional neighborhoods or high-end communities get relief, and developers with raw land or contractors with business equipment all get the tax breaks.

Last year, the tax credit in Whitefish was 29.24 mills, or $126 on a smaller $175,000 market value home. With voter approval, tax relief increases 50 percent this year and continues for a decade, as will the funds kept by merchants for collection. Road and park repairs remain constant.

Richard Solberg wrote in a local newspaper that the Haskill Basin deal is a “no-brainer.” Solberg asserted that, “The increase will not change shopping habits.”

Locals supporting Whitefish businesses have a new incentive to shop locally as the bulk of the proposed 1-point increase protects their public drinking water.

If April voters opt for the 1 percentage point increase in tourist taxes, over the decade locals can anticipate a total of $18 million for roads and sidewalks, over $10 million in property tax relief, over $2 million in merchant collection relief, $1.4 million for parks, and a permanently accessed Haskill Basin that protects their public water supply.

Towns across Montana seek tourist revenues, but none of this public watershed protection, street and park repairs, or property tax relief occurs without locals supporting the business merchants that collect the funds. If citizens want clean water and tax relief, there is a fresh incentive in town to support local merchants.