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Council mulls sales tax for November ballot

ERIC WELCH | Hagadone News Network | UPDATED 2 months, 2 weeks AGO
by ERIC WELCH
Staff Writer | August 27, 2024 1:00 AM

SANDPOINT — When Mayor Jeremy Grimm campaigned last year for the highest leadership position in Sandpoint, one of his core tenets was simple — to rehabilitate Sandpoint’s roads. 

Now, he’s one step away from bringing a proposed solution to voters in November.

“For local government, the needs are basic infrastructure,” Grimm told the Daily Bee in an Aug. 22 interview. “The ongoing cost to turn a blind eye to this only increases the problem. We can’t kick the can down the road.”   

Grimm’s proposed measure to improve the condition of Sandpoint’s streets — a 25-year local option sales tax — emerged ahead of an early August council meeting. For the measure to go into effect, councilors will need to agree before Sept. 6 to place it on the November ballot, where it would need support from 60% of voters. 

Over the last several weeks, the initiative has split into two primary variants. One option is a year-round 1% tax on local retail sales; the other is a June-September 2% tax designed to target out-of-town spenders during Sandpoint’s peak tourist season. 

According to Grimm, both would generate “about the same amount” for the city. 

To emphasize the importance of street care, Grimm cited an August 2020 pavement analysis conducted by the city. 

The analysis determined that Sandpoint’s streets scored a 61 on the Pavement Condition Index — on the low side of the national average of 60-65. 

Importantly, the report also stated 21% of Sandpoint’s roads rated as poor or very poor. According to Holly Ellis, city construction manager, “that is double the national average.” 

While several councilors expressed support for bringing a potential road care solution to voters in November, some also voiced concerns about the measure’s viability. 

“I think that we're really in danger of not getting it approved if we make it too complex,” said Councilor Kyle Schreiber. 

Councilor Joel Aispuro brought up the rising cost of food and other consumer goods as an additional concern. 

“I think we all know that life is hard with inflation,” said Aispuro. “I know with four kids, going out to the grocery store is very expensive.” 

“What I love about this is that the people choose,” Aispuro added of the tax option. 

According to Grimm, grocery sales are the largest contributor to retail sales tax collection in Sandpoint. 

A tax on food and other critical goods like clothing would place additional strain on low-income residents — an unfortunate truth not lost on the mayor. 

“It does impact lower income households disproportionately,” Grimm said of the tax at an Aug. 21 council meeting. 

Grimm has said there are few other ways Sandpoint can generate the necessary funds for a large-scale road care project, and sees a sales tax as the only way to achieve the goal. 

“I don't pretend to favor this tax,” he told councilors on Aug. 7. “Barring a solution like this, I do not see any path forward to fix our roads.” 

Council President Deb Ruehle expressed concern about the tax’s burden on the low-income community and its potential long-term effects on Sandpoint’s demographics. 

“I think 25 years is an awful long time,” Ruehle said at the Aug. 7 meeting. “I want us to be thinking of the bigger picture of all the issues that the city has, not just one issue.” 

Ruehle added that a funding initiative may be better directed at measures to quell rising living costs like incentivizing developers to create affordable housing “so we don't turn into a city in 25 years that has great roads for a lot of remote employees and a lot of wealthy retirees.” 

If the initiative is to come to fruition, time is of the essence. 

The submission deadline for a measure to appear on the Nov. 5 ballot is Sept. 6. The upcoming Sept. 4 meeting will be councilors’ last regular gathering before the deadline, and potentially their last chance to vote a sales tax onto the ballot. 

Additionally, Idaho Code dictates that Sandpoint can only levy a local option tax due to its status as a “resort city” with a population below 10,000. The status will almost certainly expire by the 2030 census, removing the opportunity for a long-term tax unless it’s locked in before the population threshold is reached. 

That six-year window, however, is not guaranteed. According to Grimm, the laws surrounding local option taxes are constantly subject to change. 

“Every year at the state legislature, the resort city legislation is discussed,” Grimm told the Daily Bee. “Basically, it's uncertain how that legislation will pan out in the future.” 

“What we know is right now, we do have this option available to us,” Grimm added. “I want to provide this option to the voters as a solution to the problem that we're in.” 

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