CB Council Reaches Settlement on What to Present Voters – The Crested Butte Information

Three “reasonable” Tax increases

by Mark Reaman

It looks like Crested Butte voters will be considering multiple taxes in the November election that will focus on financing affordable housing. An increase in the current community sales tax rate and excise tax for short-term rentals along with a new tax for the “non-primary residence” would bring in around $ 2.1 million annually for affordable housing and will be raised in two separate voting questions with the STR tax increase yourself alone.

Although it is not official until the vote of the council at the August 16 meeting, the council decided at a working meeting on August 10 that they would put forward the three tax proposals. This includes the new non-primary residence tax (formerly known as empty house tax, formerly known as dark house tax, formerly known as community maintenance fee) of $ 2,500 per year; a 0.5 percent increase in city sales tax; and an increase in the consumption tax for short-term rents from 5 percent to 7.5 percent. The $ 2,500 tax would apply to both vacant residential lots in the city and units under construction.

The council hopes to tie the non-primary residence tax and the sales tax hike together in a referendum so that it is clear that both second home owners and year-round locals are contributing to affordable housing. None of the taxes would have a sunset to make future bonding opportunities easier. An escalation clause in the new non-primary residence tax would be linked to the consumer price index. Basically, a primary residence would be defined as a unit that is occupied by an owner or rented for at least 180 consecutive days. The money raised will flow into the city’s budget for affordable housing.

City officials will now, with the help of a special legal advisor, polish the details and convert the direction of the council into the electoral language. The language will be put to the vote of the Council at the meeting on August 16. If voters approve in November, the council would then pass the taxes through an ordinance that could include exemptions from the proposed tax, among other things. These potential exceptions are expected to be discussed in the autumn before the vote. One major exemption, apparently preferred by the council, is to allow second home owners to join a nonprofit that deals with affordable housing instead of paying the tax. Second homes with long-term rented outbuildings are also likely to be excluded.

The public interferes … again

There have been numerous public comments on the matter over the past month and Monday’s working session was no exception. Residents and second home owners spoke out for and against the tax idea.

“Decoupling the two main controls is a terrible idea,” said John Spencer. “The idea was to broadly support this funding. If the empty house tax goes through and the sales tax does not, it violates the basic idea of ​​cooperation. “

“We have a huge affordable housing crisis, but I’m not sure you can assume that residents want this on the ballot,” said Glo Cunningham. “I am very much against this approach and have the feeling that it alienates the secondary owners in the city. You contribute so much to our community facilities. The exposure should be nationwide and not just on Crested Butte. I suggest forming a committee to take second home owners to places where they can help with the problem and get a write-off. Give people the opportunity to decide how they want to help before going to a tax. “

Ben Wright agreed. “The non-primary residence tax is divisive and a dangerous path,” he said. “The second home owners and the locals need to work together. We shouldn’t cause trouble between them. If we ask nicely, it will happen. I agree that the tax is not fair to them, but it is also not fair that we should work so hard to accommodate our local workers. We can meet in the middle. The fact is that we need something in the immediate future. If it’s a state of emergency, do something. “

Lindsey Freeburn said it was important to have a reliable source of funding to address the housing problem and not rely on donations. “This is a tool in the toolbox, so go ahead with the ballot problem.”

“John and I want to help, but we’ve had a lot of feedback that there’s a lot of trouble among second home owners,” said Haden Spencer. “It was a rushed, flawed process and you only had six weeks to decide on a breakthrough policy. I ask you to pull the brakes and allow more conversation. “

“Having a compelling plan and working with everyone is the way to go,” said a second homeowner. “And a flat tax is very regressive.”

Jim Starr said it was no time to make significant changes and this tax proposal did so. “We are losing the core of our community,” he said. We have always said here that growth should pay off, but in this situation I think the non-primary residence fee should be coupled with a VAT increase. “

“We support the search for a sustainable financing solution, but this idea is controversial,” said Spencer Shomer. “It should be borne by all property owners.”

Bennet Link said he had noticed the gap between the “have” and the have-not been widening in Crested Butte, but an empty house tax would widen that gap.

“Everyone loves it when someone else pays to solve a problem,” says Todd Huckstrom. “It’s human nature and I could see that a tax is passed on and the sales tax is not.”

Julie Henning said the people who rent their property on short notice are the city’s hosts who add to Crested Butte’s main business – tourism.

Cole Thomas suggested that every time a short-term unit is rented to a new one, there should be an extra charge of, say, $ 50.

John Spencer said it would piss off a large segment of the community to go beyond a fee of $ 2,500. He said a $ 2,500 fee felt more like locals were getting a homestead exemption, which is common in many states.

Council comments

“One reason I like sales tax is that it spreads the burden on those who live outside of Crested Butte as well as tourists. I like that we all take part, ”said Mayor Jim Schmidt. “I was against the empty house tax from the start. It seems unfair to me for a number of reasons. And it is divisive indeed and I am disappointed that some members of our city staff have ignited this. It’s not just a problem in Crested Butte or the Gunnison Valley. It is everywhere.”

“I’m in Vermont and it’s on the front page of your paper,” remarked Councilor Mona Merrill. “And property taxes here are much higher than in Crested Butte. This is a big challenge, but everyone agrees that we need more money to deal with the crisis. I worry that too many exceptions will make it useless. ”

Councilor Mallika Magner said she was struggling with many elements of the proposal. “I am struggling with the short amount of time we had to discuss this. Nobody believes it will lead to long-term rentals. It’s a source of income, ”she said. “I don’t like the lack of a specific project for the money. It is important to show that we value our second home owners. “

“Putting this type of funding into affordable housing would be an important step,” said Councilor Will Dujardin. “A lot of people talk about how divisive it is. Most of my friends no longer live in the city. The writing is on the wall. We need funding to solve these problems, and we have special programs in Sixth and Butte and the Indeed program. Real money to support affordable housing is great. “

“I agree that there are concrete projects,” said Councilor Jasmine Whelan. “Nobody wants second home owners to feel attacked, but donations as a source of funding are not reliable. We need a regular source of funding. We have to face the fact that the community is already fragmented and we have to find a way to hold it together. The cost of living alone marginalizes the local workers. “

“I’m not interested in manipulating the market, but one of the hallmarks of this city is the diversity of the people who live here, from elevator drivers to retired executives,” said Councilor Chris Haver. “I think the tax measures should be linked to show the unity. I believe the funds would help preserve diversity in the city. “

“I think a reasonable non-primary residence tax combined with a sales tax would take the burden off the community,” said councilor Jason MacMillan. “I believe the balance within the community and the free market has been broken and I agree that the government must intervene. What divides the most is that people are being kicked out of their homes. Workers who have to live outside the city is an affront to what I consider community. I am in favor of a reasonable tax and a sales tax increase that keeps it below ten percent. “

The council went through a list of questions to find consensus on where to land. They agreed to a 0.5 percent increase in sales tax, a $ 2,500 fee for non-primary residences, and an increase in the STR consumption tax. The details will be discussed again at the August 16 meeting where the Council will vote on whether or not to be included in the November vote.