Polson voters reject resort tax a second time
POLSON — An initiative to impose a three-percent resort tax within the city of Polson was resoundingly defeated by a margin of 1,014 to 577. The Lake County Election Office tallied votes Feb. 2 for the mail-in election.
The ballot measure, approved by the city commission in October, aimed to raise revenues to fix the community’s dilapidated streets and related infrastructure by imposing a three percent tax on goods and services sold at tourism destinations such as hotels, motels, restaurants, bars and golf courses, as well as an array of luxury items.
The county mailed 2,977 ballots to active voters within the city limits and saw a return of 53.5 percent. Election Administrator Toni Kramer called that “a really good response,” especially compared to the 28-30 percent turnout that’s typical for local elections.
“I think people definitely had opinions on the resort tax and wanted to make their voices heard,” she added.
This marks the second time since 2009 that voters have rejected the resort tax.
City manager Ed Meece, who stepped into his post in December, was not surprised at the outcome and even anticipated that it would fail by about a 40-60 percent margin.
“We’re in the middle of a pandemic and business people have their own economic struggles. Plus, we couldn’t do public meetings,” he said. “But that’s the beauty of an initiative – people get to choose their own destiny.”
Bobbie Goldberg, president of the Polson Business Community and owner of Second Nature, a boutique on Main Street that sells gifts and new and upscale consignment clothing, was relieved and also not surprised.
“Probably the majority of us business owners are happy it did not go through,” she said. “We were not looking forward to taxing our loyal local people.”
Even though Polson was designated a resort community by the Montana Department of Commerce, Goldberg has a different view of the community’s economic foundation. “We have a great summer tourist season for three months,” she said. “But we’re not supported by the tourists; we’re supported by our loyal locals, our community that’s so great to us.”
Business owners were also concerned about the logistics and expense of collecting the three percent tax on luxury items. In her store, for example, which sells merchandise from vendors, consignors and her own inventory, tracking the tax would have been complicated and expensive.
During the pandemic, she invested in two $7,000 touchscreen payment devices to enable safer transactions for staff and customers. Square, the company she uses to accept payments, estimated she’d need an $18,000 system just to track the three percent resort tax. Although businesses were slated to receive three percent of the taxes they collected to help pay administrative costs, “there’s no way it would cover that investment,” she said.
She also felt it was unfair that people like herself, who own businesses in town but live outside the city limits, couldn’t vote on a tax they would be responsible for collecting.
Goldberg recently purchased her building and just completed an extensive remodeling project. “I made the investment with all my heart because I love my community,” she said. But the resort tax “was a little too much, a little too soon, for what we’ve all been going through.”
Still, she acknowledged that decaying streets are a problem that needs to be addressed. Meece agreed. The city has hired HDR Engineering to complete a street-by-street assessment. “We’ll have those numbers in hand before we make more decisions,” he said.
Other options for financing street repairs include a voter-approved citywide street maintenance district, on top of the property taxes currently assessed; or property owners could opt to create a Special Improvement District to share the tab for fixing their particular section of street.
Goldberg wonders about upping the local gas tax, as Missoula County did last summer, “so everyone who uses the roads contributes.” Montana law allows counties, through the vote of the electorate, to impose a local motor fuel excise tax of up to 2 cents per gallon, which would be dispersed among the county and local municipalities for construction, reconstruction, maintenance and repair of public streets and roads. The Montana League of Cities and Towns supports additional legislation that would permit municipalities to impose a local option fuel tax within their respective jurisdictions.
Whatever the solution, “We can’t walk away from it,” said Meece. “It won’t get any cheaper to fix our streets.”
Goldberg remains optimistic about the future and the community’s ability to fix its problems. She noted that communication is improving between city government and local businesses.
“I see Polson growing and going in a good direction,” she added. “We all want growth. There are just better ways to go about it.”