League promotes legislation to help city budgets
By LYNNETTE HINTZE/Daily Inter Lake
The Montana League of Cities and Towns will push legislation next year that aims to put more money into the coffers of struggling cities and counties.
During the league's annual conference earlier this month in Missoula, the organization outlined 10 resolutions for the 2009 legislative session. High on the agenda are plans to push for a local-option tourist tax and a proposal to divert 3 percent of the state bed tax to the cities, towns and counties where the money is collected.
Both resolutions also were part of the league's 2007 legislative efforts.
The league has supported option-tax authority for more than two decades because its members believe local voters are qualified to decide the type and amount of taxes they will pay, according to formal resolutions passed at the conference.
Cities such as Whitefish and West Yellowstone have benefited greatly from their local-option resort taxes. In Whitefish, nearly $15 million has been collected to use for street reconstruction, parks and property-tax rebates since the tax was imposed in 1996.
The league supports local discretion for such taxes up to 4 percent, with a mandatory sunset after 10 years. Like current "resort" taxes, the proposed tourist tax would be collected by local governments and used however they choose. Among the taxable items and services would be lodging facilities and campgrounds, restaurant meals and alcoholic beverages, and rental cars, watercraft and snowmobiles.
More than 10 million tourists visit Montana annually, spending nearly $2 billion.
"But not one drop of this flood of money ends up in the treasury of most cities and towns in Montana," the league stated.
A resolution to distribute 3 percent of the bed tax to local governments is similar to a bill the tourism industry tried to push through in 2007, but instead of tourism agencies getting the money, cities would get it. It targets the 3 percent bed tax added in 2003, which goes directly into the state general fund.
The rationale is that the state has a general-fund surplus approaching $1 billion while at the same time many Montana cities and counties are struggling to balance their budgets.
During the last fiscal year the state collected $13.4 million from the 3 percent that goes to the general fund, and reallocating the money to cities where the money is collected would greatly benefit tourism areas such as the Flathead Valley, according to the league.
The other 4 percent of the bed tax, which totaled $17.9 million in 2007, already is redistributed to areas where it's collected and is used for tourism promotion.
During the last legislative session, Senate Bill 284, which would have funneled the same 3 percent of the bed tax to tourism agencies and its "sense of place" partners, was vetoed by Gov. Brian Schweitzer when the budget wasn't balanced and the governor declined to sign spending bills, Whitefish tourism advocate Rhonda Fitzgerald said.
"My point is, we have a severe need for more tourism promotion funds," Fitzgerald said.
OTHER resolutions supported by the league include:
. Opposing legislation to exempt state levies or otherwise restrict the financing and operation of tax-increment districts.
. Supporting state repayment or extension of the term of the 2007 Treasure State Endowment Program to assure that grant money is available for deserving projects over the next two years.
. Arranging for introduction of a bill to remove the provision that limits local government budget adjustments for inflation to one-half of the rate of inflation.
Features editor Lynnette Hintze may be reached at 758-4421 or by e-mail at lhintze@dailyinterlake.com