Bigfork Boundaries Slow Resort Tax Efforts

By Beacon Staff

Efforts to institute a resort tax in Bigfork have stalled temporarily, as delays with the state and difficulties defining the proposed resort area’s boundaries have likely postponed a vote on the issue until next year.

Originally, the goal was to get the tax on the November ballot, but organizers now say that is all but impossible.

“We’re going to continue talking to residents and business owners to find out what they want to know about the resort tax and to continue working with the state,” Cheryl Richmond, chairman of the Bigfork Resort Tax Committee, said. “It’s definitely still ongoing, but our progress has been slower than we hoped.”

Under state law, Montana towns that are eligible for resort taxes – also known as local-option taxes – are divided into two categories: communities and areas. Resort communities are incorporated cities with populations less than 5,500 and resort areas are unincorporated entities with fewer than 2,500 people. Places that exceed those population limits aren’t allowed to put resort tax proposals on any ballots.

Eligible towns must also prove that their economy relies heavily on tourism dollars. Over the past several months, the local resort tax committee has been working on a map of potential resort tax boundaries to submit to the Montana Department of Commerce.

Potential maps, which basically encompass downtown Bigfork and the main commercial arteries around town, have twice been returned for revision.

“They want the people who live within the map’s boundaries to earn their money from the tourists,” Richmond said. “Ours have included too many people with too much income that doesn’t come from tourism.”

According to state law, tourism must be the largest income provider for the residents within the resort tax boundaries, Susan Ockert, of the department of commerce, said. For Bigfork, a town with a large retiree population that doesn’t draw its income from tourists or local businesses, finding a balance has proved tricky.

“For example, if the people in the resort tax area earn a total of $5 million from tourism, but wages and salaries from, say, pensions or social security total $5 million and one dollar, then it doesn’t work,” Ockert said. “They’re not even close right now.”

The committee though, Richmond said, would like to include as many retirees as possible because, if the tax is approved, a group of residents who live inside the resort district will be chosen to administer and control the tax and decide where the revenue goes. Retirees, she added, are likely volunteers.

Ockert plans to travel to Bigfork soon to meet with the committee and explain the group’s options further. Once a map is accepted by the state, a public meeting will be held on the issue and signatures must be gathered on a petition to bring the tax before voters.

Now that a vote in the general election is unlikely, Richmond hopes the town will be able to hold a special election or put out a mail-in ballot.

“If we have to wait until next November, we probably wouldn’t be up and running to collect the tax until the following fall,” she said. “Eighty-two percent of our business comes between July and September, so we’d miss that busy season again and it would be two years before we saw any money.”

The fundamental idea behind resort taxes is to allow places that get a lot of tourism to pay for the wear-and-tear on local infrastructure. Montana’s current resort tax communities are Whitefish, Red Lodge, Virginia City and West Yellowstone. The resort areas are St. Regis and Big Sky. Seeley Lake and Craig were recently designated resort areas, but have yet to put the question to voters.

All of the resort tax communities and areas have 3 percent taxes – the maximum – except for Whitefish, which has a 2 percent tax. That means that qualifying businesses, such as restaurants, hotels and tourist-oriented retail stores, give local governing bodies 3 or 2 percent of their gross monthly sales.

Consultants estimate that a 3 percent tax on luxury goods in Bigfork could bring in between $500,000 and $750,000 a year. “It would go a long way toward helping this community help itself,” Richmond said.