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Polson voters reject resort tax proposal

by SCOT HEISEL
Lake County Leader | February 8, 2021 8:45 PM

Polson will have to take a different route toward fixing the city’s dilapidated streets after voters rejected a proposal to initiate a resort tax in a Feb. 2 special election.

The proposal to create a 3% resort tax on a specific set of goods and services for 20 years with the specific goal of fixing the city’s streets received 1,014 (63.7%) no votes and 577 (36.3%) votes in support.

Turnout for the special election was about 53.54%, according to Lake County Election Administrator Toni Kramer.

“That’s how local government works,” City Manager Ed Meece said Monday. “Folks get to decide the destiny of the community. Two-thirds said they don’t want a resort tax. We will go on from that.”

The city’s Economic Development Council recommended the proposed version of the tax, with most of the revenue — 80 percent — going toward city street maintenance and improvements, while 17 percent would have been returned to city residents through a property tax rebate. The remaining 3 percent would have covered administrative fees associated with the tax.

A resort tax is only an option for resort towns — defined as an incorporated city with a population of less than 5,500 residents with tourism making up a significant portion of the town’s economic base. The 2010 census listed Polson’s population at 4,488.

The Polson City Commission in September unanimously approved setting Tuesday's election and presenting the proposal to the city's voters. City staff conducted four virtual public forums to answer questions and explain how the resort tax would work. Meece also met with several community groups at their request.

“Our goal was to make sure everyone had every opportunity to have all the information to make an informed vote,” Meece said. “We did what we could to educate, and the community spoke. Now it’s our obligation to listen to voters and come up with a new plan.”

The city is producing a street assessment report that will more accurately define critical areas and an overall project cost. Meece said he expects the report will be complete by March or April.

Fixing Polson's streets has been a top priority for city staff for several years now, but a funding solution has been elusive.

City staff identified three top options: a street maintenance levy, a special improvement district or a resort tax.

A street maintenance levy would create a tax paid only by city nonexempt property owners. A residential property with a taxable market value of $200,000 would pay an estimated $155.28 annually, according to city documents.

A special improvement district would have to be approved by the property owners in the district and paid for by those property owners. In essence, neighborhoods would have to band together and agree to pay to fix their streets, at an estimated cost of $335,000 per block. According to the city: “If there is an average of 10 properties on a block each property would be responsible for $33,500 plus interest to repay the SID. At an interest rate of 4% over 20 years the SID assessment would be $2,449 per year.”

Regarding grants, Meece said free money to fix infrastructure that cities won’t pay to fix themselves is extremely difficult to find.

“We’ll keep our ear to the ground to see what’s out there,” he said. “There’s always grant money here and there. But you can’t fund a capital improvement project on grants.”