Local option tax added to November ballot

SANDPOINT — With so many improvement options just out of financial reach, local officials are letting voters choose whether or not they’re worthwhile.

Ponderay and Sandpoint city councils met in joint session Tuesday night to discuss the possibility of adding a local option tax to the ballot this November. While the particulars of the proposed tax will be ironed out in the coming weeks, it will likely be a sales tax on goods and services between 0.5 and 3 percent. If introduced to the ballot, it will require a 60-percent majority to pass.

City planners Jeremy Grimm and Erik Brubaker introduced the measure as a means to initiate community improvement projects that are currently fiscally unfeasible under a balanced budget. According to their data, a 0.5-percent tax would generate $612,500 per year, while a 3-percent tax would generate $3.6 million per year. Those figures include both Sandpoint and Ponderay business, and Ponderay would generate the majority of the revenue thanks to its big box stores.

On the flip side, the planners estimated that a 1-percent sales tax would mean an increased tax burden of $71.38 for the county’s median household income of $39,223.   

For Sandpoint, a number of projects are on the table but currently have no funding, including moving City Hall back downtown, parking lot development, a parking garage, the Pend d’Oreille Bay Trail, Memorial Field improvements, SPOT bus support, a community center, a high-quality transportation network, a top-notch parks and recreation program, a long-term comprehensive plan and downtown revitalization.

As for Ponderay, Field of Dreams development, improvements to the retail area’s streets, storm water system and other infrastructure, a Union Pacific railroad crossing, Pend d’Oreille Bay-related projects, a BNSF underpass, traditional neighborhood streets, underground storm drainage and neighborhood revitalization are all appealing prospects.

However, no money exists for these projects. The city planners said a local option tax may be one solution to kick-start community development.

“During your elected term, will you be satisfied with merely discussing the plans and visions for your community, or do you desire to provide voters with an option to fulfill these dreams?” Grimm asked council members.

Sandpoint and Ponderay officials decided to work in tandem on the proposal to maintain a balanced playing field. That way, Sandpoint residents wouldn’t have a particular impetus to grocery shop in Ponderay or vice versa. Nevertheless, the communities will take a separate vote on the matter in November. One set of voters might strike it down, while another could pass it.

Increased administrative costs are another downside to the local option tax. Sandpoint City Treasurer Shannon Syth said the city would likely require another part-time employee to manage the extra workload.

If passed, the local option tax would by far have the largest impact on Ponderay. The city officials have long decried the unfairness of the substantial cash Ponderay generates for Boise compared to the small amount they receive from the state due to low population. Furthermore, the city’s status as a commercial hub puts heavy strain on its infrastructure. According to Grimm, a local sales tax could double or even triple the city’s revenue.

“I think this could be incredibly transformational for a city like Ponderay,” Grimm said.

 However, work will need to be completed quickly in developing the ballot measure, defining its tax rate and choosing what businesses it will impact. The county requires ballot language by Sept. 7, which means the cities will need to approve the language by the first week of September.

Council members on both sides agreed the short window of opportunity  was unfortunate. Of all the gathered city officials, Ponderay Councilman Steve Geiger was the least supportive of the proposal based on its suddenness and the state of the economy.

“During these economic times, I have a problem funding things like trails on the back of taxpayers,” he said.

However, officials in favor of developing a ballot measure argued the matter would ultimately be decided by voters, who would have plenty of opportunity to review the pros and cons before November.

“I don’t see a reason to be scared of putting something on the ballot other than the cost of putting it on the ballot,” Sandpoint Councilman Justin Schuck said.