Funding water project with resort tax makes sense

Convincing a community to protect its water source is an easy sell, a no-brainer.

Water quality is something that is universally treasured. We all want clean water not only for drinking water and personal use but also for the myriad ways water touches our lives: Swimming, water-skiing, floating, fishing, boating, farming, gardening... and the list goes on.

How to pay for water quality is another matter, and one Whitefish faces next month. Through a special election, Whitefish voters will decide whether to raise the city’s resort tax from 2 to 3 percent in order to pay for the long-term protection of the city’s water supply in Haskill Basin.

The city is looking for a way to raise $8 million for its share of a conservation easement protecting forested acreage in Haskill Basin that is owned by F.H. Stoltze Land & Lumber Co. That’s where Whitefish gets 75 percent of its water supply, but it’s a precarious arrangement. 

The city’s ability to use water from two creeks on Stoltze land has been enabled by nothing more than a handshake agreement for over a century. If the owners decided to assert their property rights, or sell the land outright for development, Whitefish would be left seeking more expensive water resources and would lose a valuable resource forever.

Fortunately Stoltze is a good neighbor. The family-owned timber company has offered to sell the easement — valued at $20.6 million — for $17 million. Stoltze is chipping in $4 million, and $9 million is coming from federal grants and conservation programs. That leaves $8 million for Whitefish to contribute.

The Whitefish City Council decided the resort tax is the fairest way of paying the city’s share of the easement cost. We agree. A 1 percent increase in the resort tax seems like a reasonable solution, since both locals and visitors use Whitefish water, and building a property-tax rebate into the 1 percent tax increase aims to diffuse the financial impact on local residents even further. 

Of course, Whitefish voters have the final say in whether to spread the tax burden to everyone who shops, eats or stays in Whitefish over the next 10 years. But most residents seem pleased with the results of the current 2 percent resort tax, and by adding an extra penny per dollar spent, Whitefish expects to raise well over $8 million by the time the tax sunsets in 2025. 

There are other options. The City Council could raise water rates by 47 percent over that same 10-year period, a move that could financially strap those on fixed incomes. Or it could ask voters to support a general obligation bond. There’s no guarantee a bond measure would pass, though, and Whitefish’s water supply is too precious of a commodity to rely on a long shot.

Raising the resort tax will be a challenge for many Whitefish business owners. They argue the added tax may make shoppers think twice about spending money in Whitefish when they can easily travel a few miles away to tax-free Kalispell. It’s a legitimate concern, especially in the wake of a depressed Canadian dollar that has slowed trade from across the border. Whitefish businesses also face the upcoming cost of a special tax district to support a parking garage planned with the new City Hall.

But the solution to helping Whitefish merchants is simple: Whitefish residents who gain the most from protecting the water quality should make an effort to shop locally. Spending more money in the resort town’s shops and restaurants will help business owners and it will generate more resort tax revenue, making it a proverbial win-win scenario for Whitefish and its water resources.