A proposal for an optional 1-percent increase on resort taxes went before a Senate tax committee Thursday, with the only opposition coming from legislators on the 12-member panel.

House Bill 262 would allow taxing jurisdictions to bump the current resort tax ceiling of 3 percent up to 4 percent, so long as that new revenue is dedicated to historic renovation or workforce housing. It passed the House 54-45 last month.

Bill sponsor Rep. Kerry White, R-Bozeman, said during the Thursday hearing that Whitefish could bring in an extra $968,000 based on 2014 numbers. Whitefish’s resort tax currently is set at 2 percent, but in April city voters will consider a ballot issue to raise the tax to 3 percent to help fund a conservation easement in Haskill Basin.

White said his proposed law originated at the request of his constituents in West Yellowstone, one of the gateways to Yellowstone National Park. That town is currently trying to preserve a historic railroad station and would like to capture more visitors — and their spending — by improving the historic district.

“West Yellowstone, you have a million visitors going through town in one tourism season,” White said. “What they’re trying to do is create something within that historic district to improve it so people would stop and have someplace to go. ... You can imagine the impact and the positive benefit to the community and the economics if you can just make them stop for one more day.”

He said the option to use the money on workforce housing stemmed from Big Sky, where he said 86 percent of workers commute from Bozeman due to the prohibitively high cost of housing where they work. 

David O’Connor, president of the Big Sky Chamber of Commerce, noted that affordable housing support from the tax would be geared toward helping out full-time employees rather than seasonal workers.

A number of representatives from regional and state business groups spoke in support of the bill, with none speaking in opposition. 

However, several members of the Senate panel expressed skepticism about raising taxes and whether the money should be specifically earmarked rather than being left to the discretion of voters.

“I’m not sure I understand why ... you are earmarking it or limiting what you can spend it on. Seems to me if you can raise additional money, you might like to spend it on purposes other than these,” said Sen. Dick Barrett, D-Missoula. “As I understand it, when you take these votes to the public, you have to explain what you’re going to use the money for and different communities have provided for different kinds of remedies.”

Mona Jameson, a lobbyist for the Big Sky Resort Area District, responded that the language would offer a safeguard for those needs unique to resort areas.

“The attempt here is to guarantee a revenue stream for this purpose that would be dedicated outside [of other needs],” she said. “I also believe, in candor, that this is easier to pass than another 1 percent without the narrowing.”

Glen Loomis, a business owner and former council member in West Yellowstone, added that affordable housing and historic renovations typically come in last when resort tax revenues are divvied up.

However, Sen. Taylor Brown, R-Huntley, expressed discomfort that the Legislature was being put in the position of deciding priorities for self-governed tax districts and municipalities.

“We’re asking you to help us, help us protect ourselves from ourselves,” Loomis responded, prompting chuckles from the panel. He gave the examples of swimming pools and individual grants eating up tax revenues and leaving long-term restoration projects without necessary funding.

Community leaders in Whitefish have expressed support for the bill.

Whitefish Housing Authority director Lori Collins reviewed the bill and said it would be a good use of resort tax money to fund affordable housing.

“The housing authority is supportive of all ways and means to achieve our goal of providing affordable, safe and decent housing for the residents of Whitefish,” Collins said.

Rep. Ed Lieser, D-Whitefish, said in an interview that the proposal is a solid one.

“This bill gives the community the option — they can choose whether or not they want this additional tax,” Lieser said.

“In the case of Whitefish, we have both issues this bill would solve. We have historic buildings and we have a very serious workforce housing and affordable housing issue. In speaking with my city manager and some of the council, they’re delighted to have this opportunity to address some community issues.”

Whitefish first initiated a 2 percent resort tax in 1996. The collections on restaurants and bars, lodging and retail are used for street reconstruction and property-tax rebates for city residents.

Whitefish’s resort tax revenue in fiscal year 2014 was $2.09 million. Of the Montana communities with a resort tax, Whitefish is the only city with a rate below the 3 percent limit.

The committee took no executive action on the bill.

Whitefish Pilot Editor Matt Baldwin contributed to this story.