Blue River tax questions aimed to make up for property values
September 23, 2010
BLUE RIVER – The town is asking voters in November to approve sales, use and accommodations taxes as Blue River braces for a loss of property tax revenue in 2012.
“The impact to the residents is pretty small,” town Trustee Robert Theobald said. “Everyone in Blue River is paying sales tax in Breckenridge on their groceries, for the most part.”
Ballot questions 2c, 2a and 2b – respectively – propose a 3.4 percent tax on short-term property rentals; a 2.5 percent tax on in-town sales and taxable services; and a 2.5 percent tax on use or consumption of building materials and storage, use or consumption of registered motor vehicles purchased at retail.
Trustee Jon Warnick, who opposes the taxes, said the town collects none of the proposed taxes directly but receives sales tax through Summit County on some services.
Other trustees say that with countywide property values falling an average of 20 percent in the most recent assessment, the taxes will help insulate the town against the loss to the town’s primary source of revenue: property tax. In 2010, property tax revenue comprises about 72 percent of the town’s budget.
“Almost all of our money – well over 90 percent – is for police and road maintenance,” Theobald said. “If things fall back, we’re going to have to cut back on something. Those are hard things to cut back on.”
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Mayor Lindsay Backas, a Republican running for Summit County Assessor, supports the three taxes.
“This is a matter of survival for the town,” she said, adding that it will make Blue River similar to other local towns in terms of taxes collected.
The town has little to no commercial sector, and 2a and 2c are intended to help bring in revenue through vacation rentals. Blue River officials seek to get on board with a program beginning this fall through Colorado Association of Ski Towns.
The online program monitors vacation rentals to help ensure tax revenue is collected. Backas said that though short-term rentals are prohibited in Blue River, people have been posting ads to websites such vrbo.com and craigslist.com.
“People are doing it now, and the town is not gaining anything from it,” she said.
Town and County Clerk Kathy Neel said it’s tough to say how big an impact the vacation-rental taxes could have on the town coffers.
“There’s nothing to base it on, because it doesn’t exist,” she said.
Trustee Larry Nelson said short-term rentals “have a big impact on our neighborhoods and our streets.”
“We do hear complaints from townspeople about short-term rentals,” he said, adding that houses will sit empty for extended periods before many cars are suddenly parked outside.
Warnick said that while property devaluation will hurt the town’s coffers, “before we start raising taxes, I’d like to see where we are.”
“We have a prudent amount of money put away,” he said. “If there’s a need for it next year, then in my opinion we just put it on the ballot next year.”
Warnick said he’s actively been pursuing revenue the town is already missing out on, such as cell phone, cable and utility services. He said that often the money has been routed to Breckenridge, the town’s bigger neighbor with the same zip code.
“I expect more gains in this area,” he said.
Warnick also said he’s had Democrats as well as Republicans tell him they can’t afford any tax increases.
“That’s the feedback I’m getting: That it’s just not the time to be raising taxes when families are cutting back,” he said.
SDN reporter Robert Allen can be contacted at (970) 668-4628 or firstname.lastname@example.org.