In May 2018, the Tourism LOT is up for renewal. Tell City Council what changes should be made as we move into the future?


 

What is the Tourism Local Option Tax?

Idaho Code allows for an occupancy tax upon hotel, motel, and other sleeping accommodations rented or leased for a period of thirty (30) days or less. The voters of the City of McCall voted to approve an ordinance that provided that the City of McCall has met the requirements set out in Idaho Code. In McCall, voters approved a 3 percent local option tax on lodging in 2005 and renewed it in 2011.

Local Option Tax Renewal

The current Tourism LOT expires as of December 31, 2018. The Council will conduct reviews of the public to determine if a renewal ordinance will be developed and if so what items would be considered for funding. The targeted date to go to the voters would be May 2018.

Expect Some Changes

There will be language changes to this ordinance ensuring that we follow the state constitution when giving public dollars to private entities. Moving forward, under the new ordinance, anyone applying for funding from the LOT, will have to provide a public purpose in exchange for those funds.

 

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Resort Tourism Tax Survey Available Now!

Why a Resort Tourism Tax

A Local option tax exist for a small portion of Idaho cities: resort towns with a population of fewer than 10,000 residents. Thirteen cities in Idaho have this resort or tourism tax, such as Hailey, Ketchum and Sun Valley and McCall. The idea is to use revenue from visitors to develop and maintain adequate infrastructure and services.

McCall is a destination resort City that derives a major portion of its economic well-being from businesses catering to the recreational needs of travelers.  These visitors and travelers place an undue burden on the taxpayers of the City by inflating the number of people the City is required to provide services for.  The local option, non-property tax is an opportunity for McCall to offset the cost-impact of these visitors on the City’s infrastructure.

Local Option Tax Commission

The members of the LOT Commission have the responsibility to develop annual budgets and make specific recommendations for the use of the local option non-property tax revenues derived from the taxes assessed pursuant to the ordinance.

  • The LOT Commission annually hosts public meetings prior to making its recommendation to the City Council for the budget for the upcoming fiscal year.
  • At the meetings, the applicants for the LOT revenues present their projects to the LOT Commission.
  • The LOT Commission then deliberates and makes their recommendation to Council.
  • The LOT Commission develops a proposed budget for the use of the LOT revenues to be included in the overall City budget.
  • The chairperson of the LOT Commission attends the City’s staff level budget meetings in a capacity equivalent to that of a department head during the annual budget development.

McCall is a destination resort City that derives a major portion of its economic well-being from businesses catering to the recreational needs of travelers.  These visitors and travelers place an undue burden on the taxpayers of the City by inflating the number of people the City is required to provide services for.  The local option, non-property tax is an opportunity for McCall to offset the cost-impact of these visitors on the City’s infrastructure.

Big ideas that have emerged from McCall locals includes supporting local business with incentives, improving transportation and growing existing businesses.

Community Benefits

Since it’s inception in 2005, McCall’s Resort Tourism tax dollars have been able to support a vast selection of community services from fireworks and hockey to children’s winter sports clubs and city parks.

2016 LOT by category chart

Tourism Local Option Tax Funding Categories from 2016 show the myriad of initiatives supported by the tax. Click to enlarge

The current and active Purposes for the Use of revenues derived from Tourism LOT Taxes are listed below. The 2018 May renewal vote allows the opportunity to make changes add and remove items in this list.

  • The local option non-property tax revenue derived from and collected under this Chapter shall be used for direct costs to collect and enforce the tax and only for the following municipal purposes:
  • City streets, sidewalks and pathways, pedestrian crosswalks, and public transportation
  • Construction and maintenance of City cultural and recreational facilities, including the McCall Municipal Golf Course and McCall Municipal Library
  • Services for City recreational and cultural activities including but not limited to library, community art, recreational and cultural events and programs
  • City parks maintenance, development, and beautification
  • Sheltering and or spade and/or neutering of stray animals found in the City limits
  • City Local housing program as recommended in the McCall Housing Strategy
  • Services for City marketing, advertising, tourism development and City event promotion.

PROPOSED CHANGES

  • In an effort to maintain the integrity of the intent of the Local Option Tax to mitigate the effects of tourism and comply with the state constitution, the City’s Attorney, per the request of the Council, has developed the recommended changes to the Ordinance that will go to the voters in May 2018.
  • In addition to the recommended changes to the ordinance, the City Attorney has provided Application Instructions for anyone who may want to apply for funds.

The local option non-property tax revenue derived from and collected under this Chapter shall be used for direct costs to collect and enforce the tax and only for the following municipal purposes:

  • City streets, sidewalks and pathways, pedestrian crosswalks, and public transportation
  • Construction and maintenance of City cultural and recreational facilities, including the McCall Municipal Golf Course and McCall Municipal Library
  • Services for City recreational and cultural activities including but not limited to library, community art, recreational and cultural events and programs
  • City parks maintenance, development, and beautification
  • Sheltering and or spade and/or neutering of stray animals found in the City limits
  • City Local housing program as recommended in the McCall Housing Strategy
  • Services for City marketing, advertising, tourism development and City event promotion.

The message is simply this: Municipal purpose by law in the State Constitution requires the Local Option Tax be applied to municipal purpose. EXPLAINED: That means you may still apply for LOT tax but it needs to be lawful, as a contract and directly affect the city taxpayers and citizens of McCall. LAW PROHIBITS CITY GOVERNMENT FROM GIVING FUNDS TO ANY PRIVATE ENTITY WITHOUT EXCHANGE FOR PUBLIC USE.

Review these informational graphics below explaining was is lawful and unlawful.

 

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Quotes from the City Attourney explaining what must be in place for tax funding.

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2017LOT by category chart funded organizations
Organizations that received funding from more than $400K in Resort Tourism Local Option Tax dollars in 2017.

The Future of the community’s Resort Tourism Tax – Answering the tough questions

To help City Council and the LOT Commission understand the current goals of the community regarding our tourism tax program, a series of questions and comment sections have been developed to gauge responses.

According to the recent Comprehensive Plan Update data,  McCall’s infrastructure, affordability and housing options topped out as major concerns of the community.