After voters opted against the so-called “seventh penny” or “general penny” sales tax on Nov. 3, the Jackson Town Council is examining ways to overcome a budget shortfall. At its Monday workshop, it delved into the idea of levying a property tax on town residents.
Multiple possibilities were discussed by the council, from Councilor Arne Jorgensen’s suggestion that they look at levying a half-mill tax now and ease voters into the process, to Councilor Jim Stanford’s proposal that they jump in by levying at least a couple mills straight away.
A “mill” is a property tax term equaling one one-thousandth of a dollar. So property owners would pay $1 for every $1,000 of their property’s market value.
However, in a somewhat convoluted formula, state statute reduces that figure to an “assessed value,” which is 9.5% of the market value. So a $1 million home would have an assessed value of $95,000, and a 1-mill property tax would total $95 annually above what the owner already pays to the county and other taxing entities.
A town property tax would be separate from any of those other taxes, with the revenue raised staying within Jackson town limits.
An article on the issue that ran in the Nov. 18 edition of the Jackson Hole News&Guide, the Jackson Hole Daily’s weekly sister paper, erroneously overstated the amount of tax the hypothetical owner of a $1 million home would have to pay based on 1 mill of property tax.
Based on the 1-mill hypothetical, a Jackson resident who owns a $350,000 market value condo would pay $33.25 annually in property tax to the Town of Jackson, as the “assessed value” of that property would be $33,250.
The council did not vote on the issue; rather it voted to direct Town Manager Larry Pardee and town staff to bring back materials for them to consider at their next meeting, set for Dec. 7.
In the lead up to the Nov. 3 election, Councilor Jonathan Schechter was outspoken about the importance of passing the seventh penny sales tax.
At Monday’s meeting, he noted that, since the measure did not pass, the council members “have only this limited number of arrows in our quiver” to overcome a projected $4.8 million budget shortfall.
New revenue must be created, Schechter said, or the town will be forced to cut its normal levels of service.
While the seventh penny of sales tax would have covered the shortfall, Mayor Pete Muldoon was quick to remind others at Monday afternoon’s workshop that “one of the other things we were very clear about [prior to the election] was property tax would be one of the options” if the sales tax measure didn’t gain voter approval.
The maximum number of mills the town — which currently levies no property tax — could add is 8, which would bring in about $3 million per year.