GRANGEVILLE – Estimates put potential revenue for Grangeville around $300,000 annually from a half-percent local option tax (LOT).
But funding is just part of the discussion for the Grangeville City Council on the merits of adopting a new tax to address public infrastructure needs. More than just whether this is a new revenue option available to the city, the issue now gaining traction in this discussion is the deteriorating state of Grangeville’s city streets, and just what is the right solution to address this growing problem.
“Some are 60 years old; they’re shot,” said Public Works Director Jeff McFrederick at last Monday’s April 8 city council meeting. “If we don’t do something we’ll be back to driving on dirt roads.”
Last week continued the LOT discussion, introduced last month by Councilor Shelley Dumas, on investigating the possibility of instituting a sales tax, revenue from which could go to municipal projects. Dumas’ estimate of $300,000 in annual LOT revenue was based on taxable sales figures for Grangeville ZIP code 83530 from the Idaho State Tax Commission. Funds would be collected locally, by the city clerk, and used for local projects.
Addressing two concerns raised at the March meeting, Dumas talked with officials in four cities – Donnelly, Stanley, Driggs, Lava Hot Springs – that had instituted an LOT and found they had no difficulty in passing a local option tax ordinance and that it had not negatively affected businesses. LOT revenue used in these communities has gone to recreation, parks, infrastructure, and law enforcement needs.
“This is a potentially important source of revenue,” she said. “I’d hate for us to dismiss this until it has been thoroughly discussed. On that point, she noted the Grangeville Chamber of Commerce would be raising the issue with its members at its April 24 meeting.
The local option tax is available to cities that have less than 10,000 in population and derive a major portion of their income from businesses catering to recreation; essentially, resort or tourist destinations. LOT adoption requires a 60-percent voter approval.
A local option tax would bring “new dollars to Grangeville,” according to Super 8 Motel owner Ted Lindsey, who was in attendance at Monday’s meeting. That being said, he questioned whether Grangeville would qualify for an LOT, based on a 1997 city feasibility study that determined the community receives transient traffic, “going from point A to point B; we’re not a destination point,” he said. His business already pays a 2 percent sales tax to the Idaho Travel Commission, which promotes state tourism and recreation, “and we don’t see a lot of that return.” Rather than an LOT, he’d prefer adding a dollar to his rates to pay his staff more.
In general, city council discussion has come to no official opinion for or against an LOT, apart from concerns, mainly raised by Mayor Bruce Walker, that such a tax would negatively impact local business, and that the majority of the revenue raised would be from city residents. As the matter concerns revenue to benefit local projects, last week’s LOT discussion also addressed deteriorating city streets. Walker discussed LID (Local Improvement District) projects, in which property owners share in the costs of an infrastructure improvement, as a more equitable way of funding such work. However, even with that, he raised issue with such improvements that in the long run the city then assumes and has to continue maintenance on. An option in the city’s five former LID areas, he suggested, would be to approach those property owners to do a new LID for street improvements.
McFrederick said a problem with LIDs – besides people’s automatic negative association with them — is 15 to 20 percent of the cost is lost in having it engineered, so he sees the need to be creative on how both funds and projects are budgeted and implemented to “keep that money home.” Though no specifics were discussed Monday night, McFrederick said he is working on a proposal to bring to the council at an upcoming meeting to address both street maintenance while also putting aside funds in a growing reserve.
“We’re just putting a Band-Aid on top of bad roads,” he said, “and we need to try and change that.”