Susan Nicosia, who retired last June after serving as Columbia Falls city manager for 13 years, told the Polson City Commission Monday that a 3% resort tax has been a boon to her community.

The tax, approved by 53% of voters in 2000, has allowed Columbia Falls to hire two fulltime firemen and two additional police officers, provide matching money for a park grant to pay for playground equipment and a federal grant to finance a walking path, and add a rescue truck to the fleet of emergency vehicles.

Historically, the resort tax has been a hard sell to Polson voters, with more than 80% voting against the measure in 2009, and around 64% voting it down in 2021.

Still, faced with chronic funding shortages and growing demands for city services, the commission met Monday to revisit the issue in a workshop setting, and invited Nicosia to discuss how Columbia Falls passed and utilized the funding.

To even qualify to place the tax on the ballot, a community must have fewer than 5,500 residents (Polson’s tally in the latest census was 5,100) and be able to prove to the Department of Commerce that “a major portion of the community's or area’s economic well-being must be derived from businesses providing goods and services to non-business travelers.”

Once a community qualifies for a resort tax, city government has a two-year window to gain voter approval. Typically, the tax will remain in place for up to 20 years.

By state law, the resort tax, as with all local option taxes, is capped at 3% and can only be assessed on non-essential “luxury” goods and services sold by businesses within city limits.

Nocosia told commissioners that a committee met twice a month to seek input on the proposal and craft a comprehensive list of items that would be taxed. It took them 18 months of work before the ballot measure appeared before voters. As a result, they were well prepared.

“I think what our council, what our community did correctly is they had already decided what they were going to tax and when they were going to tax it, and what the ballot was going to look like,” Nicosia said.

They were able to tell the community that 55% of the funds raised would go to public safety, 14% for other infrastructure needs, 5% to business owners for their efforts to collect the tax, and 1% to the city for administering the tax. They also give property owners a 25% rebate on the money collected, to offset the tax locals pay on luxury items.

“My advice is to keep it simple and engage the community in the discussion so they know you’re not taxing the necessities of life,” she said.

Remembering past battles

Ed Meece came on board as Polson’s new city manager in October 2000, the same month the Polson City Commission voted to put a resort tax on the ballot.

 “I still have scar tissue,” he said of the last go-around. Despite an intensive public education effort, the measure failed to pass by a margin of 1,014 to 577 in February 2021.

Part of the challenge was “trying educate advocate for a resort tax in the middle of a pandemic when so many businesses were hurting,” he added.

Meece also noted that members of the Economic Development Council that put the ballot measure together “didn’t come over to the next phase” of actually promoting the tax to the community, largely leaving that task to city staff.

Commissioners Carolyn Pardini and Brodie Moll, who were both serving their first terms in office at the time, agreed, citing a “leadership vacuum.”

Business owner and Polson Chamber president Joslyn Shackleford said passing the measure would require “a lot of education and clarity,” and while the Chamber can’t advocate for a particular measure, “we would love to be an educator.”

Polson resident Murat Kalinyaprak, a longtime opponent of the resort tax, pointed out that he has a detailed history of previous efforts, including meeting minutes, correspondence and slide shows, posted at his website, https://polsonresorttax.info/.

“Don’t mind my comments, just look at the documents,” he suggested. “I’d rather see my government use time in more productive and resourceful ways than on a resort tax that’s failed twice.”

Dave Rittenhouse, a member of the Polson Government Study Commission, urged the commission to pursue the matter by visiting with businesses and government leaders in Columbia Falls. “You have a blueprint here,” he said of their approach.

“But don't ask somebody else to go up and do that discussion and share that message,” he added. “I think you all need to hear it directly and personally … I think it needs to come from you when you try to share the message with the world.”

Pardini noted that the last time around, some voters rejected the tax because tribal members and tribally-owned businesses would not be required to pay the “tourism incentive charge.”

“You live here on the reservation and the way it is, is the way it is,” she said. “But before this comes to the ballot, we need to have clear answers to those questions.”

Commissioner Jen Ruggless identified herself as a proponent of the resort tax because “unfortunately our coffers in the city aren't getting any larger and the wear and tear is.”

 “I'm the one pushing for this,” she added, since she views it as the only mechanism for getting the visitors who use the city’s infrastructure to help pay for it.

And given the window of five years until the next census, which is apt to show Polson’s population has risen above the 5,500 cap, “at least let's get the conversation moving.”

Pardini agreed and encouraged Meece to reach out to the Department of Commerce and bring more information to the first commission meeting in April. At the top of commissioners’ list of questions was whether Polson would even qualify as a resort community, and a ballpark estimate of how much revenue the tax might raise.

“I'm trying to think of ways to move forward rather than keep talking about it, because we've talked about it a lot,” Pardini said.