Jackson residents may now face a property tax levied by the town on the heels of the seventh penny sales tax initiative being defeated by voters Nov. 3, an increase supporters said would have had tourists bearing the brunt.
Instead, Jackson property owners now face paying a property tax to the town in addition to property tax paid to the county. The Town Council began the discussion Monday afternoon in an effort to make up for budget shortfalls that would have been covered by the added sales tax, saying they risk having to cut services to which Jackson residents have become accustomed.
“The era of Jackson’s champagne tastes and beer budget has come to an end. And that’s essentially what we are talking about,” Councilor Jonathan Schechter said, talking of future options to overcome budget shortfalls. “This community has been extraordinarily fortunate over the last many, many years, to have an extraordinarily high level of services provided by extraordinarily competent staff at all levels. And what we’re talking about here is a day of reckoning, financially, like so many other aspects of our being, this has been slowly operating in the background, and COVID has really amplified it, it’s accelerated it ... shone a bright spotlight on it, whatever metaphor you want to use.
“But the simple reality is that we are running into a place where we danced and dodged and got very lucky in many ways. That time is over. And so the fact that we have only this limited number of arrows in our quiver is only going to make things that much more complicated.”
In an interview Tuesday, Schechter clarified that after the council-supported additional penny of sales tax was voted down, the council is now forced to look at other options to balance the budget, which was projected at an approximately $4.8 million shortfall this year. Schechter said the added sales tax revenue, “about half of which would have been paid by tourists” and would have potentially brought in an additional $7 million to $8 million annually, would have covered that shortfall and allowed the town to maintain services at least at their current levels.
Conversely, Schechter noted, even if the council were to levy the maximum-allowed 8 mills in property tax, that would only raise about $3 million in annual revenue, leaving the town looking for additional income or facing cuts to services.
“Just because the voters didn’t approve the change to the sales tax, that didn’t change our financial reality,” Schechter lamented.
He said the town must now examine other tools at its disposal, including the property tax and potential cuts to services.
“The day of reckoning has finally caught up with us, and if we don’t raise revenue, we’re going to have to make cuts,” he said Tuesday.
Council members discussed the idea of raising the property tax at length at Monday’s afternoon workshop at the end of Town Manager Larry Pardee’s budget update. All four councilors and Mayor Pete Muldoon agreed that it might be a needed step.
During discussion Monday there was no vote taken to levy the property tax, only to instruct Pardee and town staff to examine the issue and bring the matter back before council at an upcoming meeting. The talk focused more on how best to introduce the property tax to the public, with the idea of one being levied seeming to be a foregone conclusion.
Councilor Arne Jorgensen, along with Schechter, held numerous presentations to support the seventh penny sales tax in the months leading up to the Nov. 3 election. He suggested that the council instruct town staff to bring back to council a resolution levying a half-mill property tax initially, “recognizing as we move into our budget session [next year] the other 7 1/2 mills would be part of the equation.”
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. On a $1 million home, the assessed value would become $95,000, so a 1 mill property tax levy would mean a $1 million property owner would pay an additional $95 annually in taxes above what he already pays to the county and other taxing entities. Again, that tax is separate from any of those other taxes paid, and the revenue raised from a town property tax would stay within Jackson town limits.
At Monday’s meeting Jorgensen said a couple of things are important in the discussions. One, that the community is properly informed and aware of what is happening and why, and aren’t hit with what amounts to sticker shock on their tax bills. And two, Jorgensen said, it’s imperative for the council to be mindful of those in the community who can least afford significant increases to their bills as the council weighs options to approach the budget deficit.
“Each of them have consequences, each of them impact different community members differently,” Jorgensen said at the meeting, and reiterated on Tuesday. “And that’s why when we have these discussions, we want to be thinking through them carefully. And how we could mitigate the impact on those that are least able to absorb it. It’s one of the reasons why — and I think that’s an important thing to remind people — that none of these are without impact.”
While Jorgensen suggested the council might ease people into it with a 1/2-mill property tax levy, outgoing Councilor Jim Stanford said he thought they should look at a higher tax rate, such as perhaps 2 or 3 mills, “I think if we’re going to do it, you should just go ahead and do it and collect a decent amount of revenue.”
The matter is expected to be brought back to the council at the next regular meeting, set for 6 p.m. Dec. 7.
Visit JacksonWy.gov and click “Watch a meeting” to attend virtually.
This version of the article has been edited to correct the amount of the proposed change on a hypothetical home valued at $1 million. — Eds.