Businesses debate proposed tax

PONDERAY — Business owners had their first chance to weigh in on the proposed local option tax at Thursday’s Ponderay Community Development Corporation meeting.

Throughout the luncheon, Mike and Clint Gunter of Sandpoint Furniture had the most to say. While they respected the fact that the city was simply trying to bring in new revenues, the pair said they believed this is not the right time to introduce a new tax.

“Although it’s a small and — some might say — insignificant percentage, it’s still another layer of tax,” Clint Gunter said. “Just explaining it to customers could hinder sales.”

In addition, they said the tax was more than an additional line item on a bill. According to Dwight Sheffler, certified public accountant for Sandpoint Furniture, there would be a financial impact to implement the new tax as well. He estimated that between equipment, training and administrative costs, the total would add up to around $1,000 per cash register.

Others questioned why discussion over adding the tax to the ballot came up so close to the election.

According to Ponderay and Sandpoint City Planners Erik Brubaker and Jeremy Grimm, it was a reaction to budgeting difficulties this year. City officials asked what tools were at their disposal for raising revenue, and planners identified the local option tax as one route. Grimm also said most business owners he’s visited are still neutral on the subject.

“A number of business owners I’ve talked to are still digesting all the information,” he added.

However, everyone agreed that the voters will have the final say on the matter. Grimm and Brubaker said their job is to simply present the information neutrally and allow individuals to decide for themselves.

“It’s really just for voters to consider for themselves whether they want to fund these projects or not,” Grimm said.   

If a 60-percent majority of voters approve the 0.5 percent sales tax with a five-year life span in November, Ponderay will use the revenue for several infrastructure, safety and park improvements, while Sandpoint will contribute to grandstand repairs at Memorial Field.

According to the data presented at the luncheon, the tax will raise an estimated $1.1 million between Sandpoint and Ponderay each year.

For a household with the 2010 median household income of $41,943, that would mean an increased tax burden of $79 a year if family members conduct all their shopping in Sandpoint or Ponderay.

Grimm also disputed worries the tax would drive business to Coeur d’Alene, saying it would take about $3,000 worth of purchases to make up the travel costs based on his calculations.