The town and county voted Monday to put a seventh penny of sales tax on the November ballot, giving the public the chance to decide whether or not they want to pay the additional cent.
“It is a tough ask,” Councilor Jonathan Schechter said. “I don’t think any of us sees it otherwise.”
As it stands, Teton County residents and visitors pay six cents on the dollar on expenses other than groceries. Four are state-mandated. Voters approved the fifth, a general revenue sales tax, in the 1990s. The sixth is a cent of specific purpose excise tax, or SPET, which is earmarked for voter-approved projects.
The seventh, if approved, would be another general levy and would mark the first time Teton County has maximized its sales tax potential. The state generally allows local governments only to impose three additional cents over the required four.
Approval would also mean the county would have the highest sales and use tax rate in the state when the tax goes into effect in April 2021. Most levy a total of 6 cents.
Officials who support the tax argued the $16 million it’s projected to generate annually for the town and county ($7 million and $9 million, respectively) would allow more funding to core services like public safety and the community rec center.
Government spending on joint departments like Jackson Hole Fire/EMS and Teton County/Jackson Parks and Recreation has increased in recent years.
Between the 2018 and 2019 fiscal years, allocations to joint departments jumped from about $8.5 million to about $11.4 million, an increase of about 35%. The town of Jackson’s share of that increased from about $3.7 million to about $5.2 million, an increase of about 40%.
Numbers for the 2020 fiscal year have not been finalized but show a more modest year-over-year increase of about 5% from 2019.
Councilor Jim Stanford argued that the seventh penny tax is a way for the town, which has a smaller tax base than the county, to keep pace with county spending.
That’s been a problem in ongoing budget talks. With revenues cratering as a result of the COVID-19 pandemic, the town has struggled to meet its commitment to fund 45% of joint departments, causing officials to ask Jackson Hole Fire/EMS to cut its budget to the bone.
“This is one of the few tools we as a community have to save our butts,” Stanford said.
Raising a mill levy — a property tax — is another, but councilors argue that a general use sales tax like the one proposed would generate more money.
“If you want to call 911 and have a response,” Stanford said, “if you want your roads plowed during the winter, if you want the Rec Center to not be closed every other day or restrict the hours of the pool — these are the core services we’re struggling to be able to pay for.”
Commissioner Mark Barron, the lone dissenting vote in the combined group of 10, said now is not the time to ask for a tax bump.
A sales tax is somewhat regressive — lower income people are likely to feel the impact of paying 7 cents on the dollar more than wealthier people — but councilors have argued in the past that tourists would make up a significant proportion of the collections.
But Barron argues the tourism landscape has changed.
“That is no longer the case — not next year, maybe not for a couple of years,” Barron said. “So when we’re talking about imposing one more penny of sales tax, remember, that’s you, your friends and neighbors paying all of that sales tax.”
As a point of contrast, Barron pointed to lodging tax, which brings in less money than sales tax, but is paid entirely by visitors.
The county levies a 2% lodging tax, which is split between the town of Jackson, Teton County and the Jackson Hole Travel and Tourism Board.
Other counties take more advantage of that revenue generating option, placing more of the tax burden on visitors than in Teton County.
Laramie County, for example, levies a 4% lodging tax and a 6% sales tax. Teton County levies a 2% lodging tax and 6% sales tax, which would become 7% if voters approve the additional penny.
The public’s thoughts have been mixed on the issue.
The Jackson Hole Conservation Alliance and other conservation groups have called for using the funds to invest in the area’s ecosystem.
Others, like Shelby Read, said the tax would shore up critical human services.
“Revenues collected from an additional cent of sales tax will help to preserve critical services and plan for a resilient future,” she wrote in an email to commissioners.
But Shane Rothman, who also wrote elected officials, thought levying an additional penny of targeted SPET would be better than a general sales tax with no strings attached.
“I am confident that it would be much more successful at the ballots, and would also have better long term results,” he wrote. “This unique tax is the best way to ensure that our expenditures are supported by the majority of residents, which increases local morale, and it will also make all of your jobs much easier.”
Voters struck down a proposal to levy a general sales and use tax with some restrictions in 2016.