Opposition focuses on funding source

The proposed 1 percent resort tax increase for Whitefish doesn’t have the blessing of everyone in the resort town.

Many Whitefish business leaders testified against the resort tax increase during a Feb. 17 public hearing on the proposal to increase the tax to pay for the city’s $8 million cost of a conservation easement to protect the city’s water supply in Haskill Basin.

Business owners took a big hit in 1996 when the original 2 percent resort tax began and stand to be financially impacted again given the recent downturn in Canadian trade, several business representatives testified.

The Resort Tax Monitoring Committee, which advises the city on street reconstruction priorities using resort tax revenue, voted in a split decision to oppose the ballot measure to increase the tax by 1 percent. 

Julia Olivares, a member of the Resort Tax Monitoring Committee, said she voted against recommending the resort tax increase because she felt the city’s other options should have explained for full disclosure.

“I didn’t care for the way it [the proposed resort tax increase] is being lobbied,” Olivares said. “Now it’s a full-blown campaign.”

She also doesn’t agree with having only city voters decide on a tax increase that affects all residents of the greater Whitefish area as well as tourists.

“This water issue affects people outside of city limits and they get absolutely no say,” Olivares said.

The Whitefish Chamber of Commerce has not taken an official position on the tax proposal, though it surveyed Chamber members about how the $8 million for the easement should be raised.

The chamber got 90 responses from 650 surveys sent out. About 40 percent favored increasing the resort tax, 40 percent favored a water rate increase and about 7 percent favored a general obligation bond.

“The rest asked, ‘Why are we doing this?’” Whitefish Chamber of Commerce Director Kevin Gartland said. “We’ve heard from those in retail who are adamantly opposed. For certain of our businesses, it’s extremely serious to them.

“We like to predict [the local economy] will be bright and rosy forever and ever, amen, but if we look in the rearview mirror we know that’s not true,” Gartland said.

The Heart of Whitefish organization that supports the downtown business district also hasn’t taken a position on the resort tax proposal.

Mike Gwiazdon, chief executive officer of Sportsman & Ski Haus, told the City Council during the recent public hearing that an increased resort tax would take its toll on the retail community just as it did when the resort tax began in 1996.

To this day, he said, Sportsman & Ski Haus has customers who will not buy from the Whitefish store and instead buy at the Kalispell Sportsman store “just so they don’t have to pay for the resort tax.”

Gwiazdon said customers won’t understand the reason for the extra 1 percent tax. “What they’ll understand is there is a tax.

“I’m not against water, but the increase in resort tax is going to be detrimental to our businesses,” Gwiazdon said.

Sam McGough, owner of McGough & Company in downtown Whitefish, told the council an increased resort tax would “open up old wounds” left from the adoption of the original 2 percent tax, according to council minutes from the Feb. 17 hearing. He maintained water users should pay for the easement cost.

McGough also told the council the impact of the decreased value of the Canadian dollar should be taken into consideration, since a drop in Canadian traffic would affect revenue projections for the 1 percent tax increase.

Retail “luxury” goods have produced the biggest share of resort tax revenue, bringing in $11.6 million as of Dec. 31, 2014.

Toni Rae Idol of Dick Idol Signature Gallery in Whitefish also spoke against the proposed tax increase at the council hearing. She noted the upcoming financial burden to business owners as the city establishes a special tax district to financially support a parking structure planned as part of the new City Hall complex.

Dan Graves, president of Whitefish Mountain Resort, spoke during a town meeting and the public hearing, cautioning the city against raising the resort tax. The resort is exempt from the tax, but it still feels the impact.

“Tourists have choices where they spend their money,” Graves said during the town meeting. “We need the water, but we need to be careful about putting that on the back of tourists.”

Results of a public opinion poll taken by Fairbank, Maslin, Maullin, Metz & Associates of Santa Monica, California, in January indicated that 57 percent of survey respondents likely would favor the resort tax increase. The firm surveyed 175 of Whitefish’s approximate 6,500 residents.

The Trust for Public Land paid for the survey.

Brian Schott, who is handling publicity for Protect Haskill Basin (a nonprofit group established to support the resort-tax vote) said questions have been asked about the seemingly low number of people surveyed.

“The comparison of total interviews in the sample to overall population is not a meaningful statistic,” he said. “Statistical theory says a random sample drawn from a larger population can represent the opinions of that larger population within a specified margin of error — regardless of the size of the population from which it is drawn.”

For example, Schott said, a recent Gallup Poll’s nationwide survey interviewed 804 adults to represent the opinions of more than 240 million Americans ages 18 and older – with a margin of error of just plus or minus 3.5 percent. 

Features editor Lynnette Hintze may be reached at 758-4421 or by email at lhintze@dailyinterlake.com.