Polson commissioners hold public hearing on proposed resort tax
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POLSON – In a virtual meeting, city commissioners heard a presentation and public comment about a proposed additional tax on services and items commonly purchased by visitors to the area to fund street repairs in the city.
The proposed tax would be a 3 percent year-round tax on lodging, restaurants, bars, recreation destinations and other “luxury” items often sold to tourists, according to a list recommended by the Polson Economic Development Council. The city’s Economic Development Council, an advisory board to the city commission, recommended that the city council approve bringing the resort tax to a vote by citizens.
Eighty percent of the tax would go toward street improvements, 17 percent would be a property-tax rebate to Polson residents, and three percent would go to the city for the cost of administering the tax. City of Polson Finance Officer Cindy M. Dooley said the EDC decided to use the tax to fix the city’s streets because the community had expressed that improving the streets was a priority.
A resort tax has been proposed before in the town. In November of 2009, a proposed resort tax was voted down by residents. Allocation for the 2009 tax was not specified for streets or any other purpose; instead, the proceeds from that tax would have gone to general city activity.
In 2014, former city manager Mark Shrives re-introduced the idea of a resort tax. The city did a community assessment of other cities in the state where a similar tax had been implemented, and the assessment was used to develop the Polson EDC.
In August of 2016, the city commission voted against bringing the proposed resort tax to a vote by the citizens. In 2018, the city commission did a strategic planning process and identified a resort tax as a priority for economic development in the city.
During the recent virtual meeting, one community member said he saw the year-round resort tax as a burden on local residents rather than a way of capturing revenue from tourists. The resident recommended that locals should get an exemption or rebate for the tax.
Commissioner Bob Martin said there’s proof that this tax effectively targets tourists and benefits locals because every other community in the state that has implemented the tax voted to renew it when it expired. “There’s gotta be some commitment by the local citizens that this is doing them some good,” Martin said.
Another community member said the resort tax would pull money from other communities outside the city who use Polson’s streets in addition to revenue from tourists. “The streets in this city really need repair. Do we burden the 5,000 residents to pay for these streets that so many of us drive on?” she asked. “That, to me, helps the city residents tremendously: to share the burden of making them good for all of us to drive on.”
Dooley pointed out that more than half the tax would come from lodging, which is paid by visitors to the area.
One community member recommended raising the amount of the tax allocated for property tax relief to 25 percent from the proposed 17 percent. Polson meets the state criteria for implementing a resort tax. Now that the public hearing has occurred, the commission will vote on whether to introduce a ballot measure to the public, and if that passes, residents of the city will vote on the tax early in 2021.