C-Falls resort tax worthy of consideration

Last month we reported that Columbia Falls is considering a resort tax as a way to pay for expanded emergency services and reduce property taxes in the city. It would be prudent for city residents to keep an open mind about this revenue-generating tool that has proven to be wildly successful in other Montana communities faced with the strains brought about by Montana’s booming tourism economy.

Let’s face it, the secret is out about Columbia Falls. The population continues to grow and visitation is rapidly climbing as the city’s core area is redeveloped. In turn, the burden on the city’s emergency services is beginning to show. Police are responding to twice as many calls as they were just five years ago and the volunteer fire department is paged daily.

The reality is that within a few years Columbia Falls will hit a population mark where state law requires the city to have a paid fire department. And once the city hits 7,500 residents — it’s at about 5,500 now — the city will have to provide 24/7 emergency coverage, estimated to cost about $450,000 annually.

Residents could float a levy to fund those services, or they could share the cost with the millions of tourists who pass through the city each year.

A resort tax is placed on goods and services, like hotels, campgrounds, vacation rentals, fast foods, restaurants, alcohol and other luxury items, but not groceries. According to the state, the fundamental idea behind a resort tax is to allow places with high numbers of visitors, but relatively few residents, to manage the wear-and-tear on local infrastructure without overburdening local citizens.

Estimates suggest a 3 percent tax on select goods and services would easily fund the expanded emergency services needed in Columbia Falls. As currently suggested, the city would split revenue four ways — 25 percent each for the fire department, police, road repairs and property tax relief for city residents.

To be certain, locals will pay some of that tax — we like to dine out and shop local as much as the next tourist — but don’t overlook the fact that some of those dollars will be returned through property tax rebates.

Let’s do the math. A family that spends $1,000 a year at local restaurants will pay $30 in resort tax fees. If that family’s home has a $200,000 assessed value, they would see a 7 percent tax rebate, or about $44 a year back in their wallet.

We don’t have to look far to see the potential of such a tax — Whitefish raised about $4 million in the last fiscal year, which resulted in $1.37 million in property tax relief.

One common gripe about resort taxes is that it prods locals to take their dollars elsewhere. That’s certainly true in some instances, but we don’t believe those rare occurrences outweigh the benefits.

There’s still a long way to go in this discussion. Columbia Falls still needs to be classified as a resort city by the Department of Commerce to qualify to levy the tax. In our mind, Glacier National Park’s gateway community absolutely fits those requirements.

If the state concludes Columbia Falls is, in fact, a resort community, the tax would still have to be approved by local voters. Read that again — none of this will happen without a vote by the people the tax would affect most.

So keep an open mind Columbia Falls — a resort tax just might be the right tool for the job.