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News taxes on horizon?
As commissioners approve budget, they weigh new sources of revenue.


By Kevin Huelsmann, Jackson Hole, Wyo.
July 25, 2012

Mounting maintenance costs, weak tax collections and a looming list of projects are pushing town and county officials to start talking about whether they’ll further cut budgets in coming years or look to new taxes to maintain services.

Property taxes are bringing less money into government coffers. Sales tax collections have improved in recent years, but only slightly.

Federal and state funding for local governments in coming years is uncertain at best. And the town and county have taken on more maintenance costs as they offer new services and build new facilities.

Teton County could be forced to cut library and recreation center hours and reduce the number of deputies patrolling streets, County Commission Chairman Ben Ellis said.

The county also could look for new sources of money such as another penny of sales tax or higher property taxes.

“We have to go ask that question,” he said. “Are we going to cut services deeply next year or are we going to raise property taxes or add another penny of sales tax?”

Last week, while county officials reviewed the final version of their budget for the new fiscal year, Ellis said he wants to see another penny of sales tax.

“I think that’s the appropriate way to go,” he said. “It would be increasing the burdens that benefit the public much more broadly than just Teton County residents.”

Elected officials have spent the last several years gutting their budgets to make up for falling revenue. Salaries haven’t budged.

Positions are going unfilled. Reserve funds are being depleted.

Decision makers have been able to cope with shrinking revenue, finding ways to do more with less, but they now say they’re getting closer to reaching the breaking point, Ellis said.

County officials dipped into reserve funds from the Teton County Housing Authority and Jackson Hole Fire/EMS to avoid having to raise property taxes this year. They pulled about $700,000 from Fire/EMS accounts and another $300,000 from the housing authority account to balance their budget for the current fiscal year, which began July 1.

In addition, town and county officials recently approved a new land-use plan for the county that calls for permanent funding for protecting open space, providing affordable housing and promoting alternative forms of transportation.

The new version of the Jackson/Teton County Comprehensive Plan also calls for more than a dozen new studies and research projects, forcing town and county officials to set aside money for a new planner.

Outgoing commissioner Andy Schwartz said he supports Ellis’ push for a seventh penny of sales tax. He said there are a lot of external factors, such as federal and state funding decisions, that could have big impacts on the county’s bottom line.

“I don’t see an alternative,” he said. “I’m not a proponent of raising property taxes.”

However, there will be plenty of opposition if the move gains traction.

“I’m not interested,” Mayor Mark Barron said. “I don’t think we need to add another penny to the sales tax today.”

Barron acknowledged that the comprehensive plan carries with it a broad array of costs, but he said elected officials shouldn’t rush to hike taxes before those new expenses are nailed down.

“I don’t always believe that enhancing our revenues is a necessary first step,” he said. “We have to prioritize the services we’re providing and the costs of those services.”

The state imposes 4 cents of sales tax, about a third of which is distributed to towns and counties based on population.

Proceeds from a fifth cent help pay for general operations for local governments, and a sixth cent is imposed to help pay for specific projects approved by voters.

Local governments are allowed to impose a seventh penny, a move the county has avoided.

A penny of sales tax generates roughly $9 million to $10 million per year.

“Another penny of sales tax doesn’t sound like much, but it’s one more bite of the apple,” Barron said.

He pointed out that there already have been several new sources of revenue established in the last several years, including a 2 percent lodging tax and a county-imposed fee for not meeting energy-efficiency standards. In addition, he said, the county takes in more money from its share of state sales taxes because its population grew in the 2010 U.S. Census.

Teton County imposes 57 mills of property tax, most of which goes to the state to fund schools. The tax is levied on property throughout the county, including within the town of Jackson.

The property tax paid for county general-fund operations to the tune of $6.5 million in 2011. The county also imposes property taxes specifically for the county library, fair, weed and pest control, and conservation.

St. John’s Medical Center also raises $3.4 million a year through property taxes, imposed on town and county holdings.

The town of Jackson has the option of imposing an additional property tax on town residents but does not. It relies on sales tax for its revenue.

Ellis asked his fellow county commissioners to attend various community functions and meetings in the fall to press the issue.

While Ellis has stepped out in front as an advocate of another penny of sales tax, he said elected officials have to pose to voters the question of whether they want to see fewer services or pay higher taxes.

Schwartz was the only commissioner who said he would help with the effort.