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Whitefish residents can contemplate a proposal to redistribute the city's tax revenue from the resort during a virtual city council meeting Tuesday evening.

Resort tax, a type of limited sales tax, is a 3% levy on food, beverages, hotel stays and other accommodations, ski resorts, and certain luxury items set out in the city code. While the tax applies to all consumers, it is one of the main ways the city benefits from its tourist base. Resort tax funds have been used to reconstruct the city's streets, give landowners land tax breaks, maintain parks, improve cycle and pedestrian routes, and fund a conservation effort that protects the city's water supply.

The city council is considering a proposal to extend the resort tax by 3% and adjust the use of this money. After a period of public comment, the council is expected to introduce an electoral measure sometime this summer. Voters would make the last call in November 2021. If approved, the changes would take effect in early 2025 and would last for 20 years.

The city's Resort Tax Monitoring Committee, made up of six Whitefish business people and city council member Andy Feury, unanimously recommended the plan to the city council last fall.

"The renewal language will allow further road reconstruction, but also improve community safety by completing projects like building new sidewalks in school districts, and will allow for an improvement in our vehicle transportation network," the committee wrote in a letter the council last Tuesday. "The renewal will also provide much-needed funding for the improvement and maintenance of our pedestrian and cycle path systems and for the maintenance of our city's parks."

The city collected nearly $ 4.3 million in resort taxes in fiscal 2020, which ended June 30.

The city currently transfers 25% of the resort's tax revenue to landowners in the form of property tax credits, and companies keep 5% to cover the cost of managing the tax, such as renting a car. B. Credit Card Fees. Of the remaining 70%, the city is using a third to pay off debt on a conservation effort for the Haskill Basin, which provides the city's drinking water, and two-thirds for various road and park projects.

PREVIOUS RESORT Tax coordination measures have been completed by a large margin.

Whitefish voters first approved a 2% resort tax in 1995, with 56% voting in favor. In 2004, 76% voted to extend the tax through January 2025. In 2015, nearly 84% voted to increase the tax to 3%, with most of that 1% increase being due to the Haskill Basin relief. As of last year, a 3% resort tax is the maximum tax Whitefish can collect under state law.

The city expects the easement payment to be completed in early 2025 once the resort tax expires. Instead of reverting to a 2% levy, city officials have proposed reallocating the 3% tax to increase funding for streets, parks, and bike and pedestrian lanes.

DRAFT A LANGUAGE before the local council allocates 58% of all collected resort taxes to existing roads, sidewalks, storm sewers, and underground utilities. Based on fiscal 2020 allocations, annual road and utility funding is expected to increase by $ 650,000 to a total of nearly $ 2.6 million.

The proposal would also add the word "maintenance" to the city code, which currently only provides for "repair" and "improvement" of roads and utilities. City manager Dana Smith said this would provide more flexibility and allow the city to use resort taxpayers' money on road upgrading or overburden work rather than completing the demolition and rebuilding.

The proposal would challenge parkland acquisitions, park maintenance and equipment alongside capital improvements, and bike and pedestrian paths for resort tax expenses. And it would devote 10% of resort tax revenue to parks and recreation. That would be projected $ 450,000 per year, triple the allocation for fiscal 2020.

Smith said the city should spend about $ 130,000 a year on "proactive maintenance" of paved roads that it couldn't afford.

Finally, the proposal would allocate 2% of the resort's tax revenue to the maintenance and improvement of the Whitefish Trail, which is currently not allowed under city law. Under the proposed language, that money could not be spent adding miles along the way and it could be reallocated to other bike and pedestrian routes if not spent within five years.

Under a state law passed since Whitefish began collecting the resort tax, the city would not be eligible to re-levy the tax if it were allowed to expire. In other words, if voters didn't extend the tax before 2025, it would likely have gone forever.

IN OTHER The council is expected to consider an agreement with Montana Fish, Wildlife and Parks to maintain fishing access at Beaver Lake and a call for tenders for contractors to provide recycling services at a new collection point on Monegan Road between Voerman and JP Streets.

The meeting starts at 7:10 p.m. Tuesday, one day later than normal due to the Martin Luther King Jr. Day holiday on Monday, and remotely through Webex video conferencing. For instructions on how to hire and participate, see the city's website.

Reporter Chad Sokol can be reached at 758-4434 or [email protected]

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