On August 13, 2014

Option tax alternatives discussed

By Cristina Kumka

KILLINGTON — No additional financial information was given out Monday afternoon about a plan, initiated by Killington Resort, to repeal a portion of the local option tax that provides the town with $450,000 annually.

But, there was serious concern from one of the founding members of the town’s pioneering economic development arm.

Jeanne Karlhuber, business owner and former chairwoman of the Killington Economic Development Commission (EDTC), questioned if the resort was rushing a plan that needed voter approval, despite funding details not yet released to those voters.

Resort leaders have said repealing the sales and use portion of the local option tax would provide “seed money” for summer infrastructure improvements, like more mountain biking improvements and ziplines.

The discussion was part of the regular EDTC meeting held at the town offices Monday at 3:30 p.m.

The commission is considering the proposal to remove the option tax and seeks ways to off-set programs potential hurt by the loss of town revenue. One option the board is considering is to transfer the costs for town-generated summer events, to a new foundation called the Killington Pico Area Association, Killington Town Manager Seth Webb explained. Instead of the town, the association would be charged with putting on the events, which, in the past have cost the town approximately $250,000 annually.

The foundation would be governed by an executive board comprised of resort, chamber and town members. The remaining loss of option tax revenue would affect the general fund to the tune of about $200,000, and would have to made up by a tax increase for property owners.

Karlhuber also stressed the importance of ensuring that the events created over the last six years by the town and the EDTC would be retained.

“That is a major concern of mine … that the events are not lost through ineffective planning or wishing,” she said. “We need an honest buy in.”  Karlhuber also said voter-approval could be hard to come by. “If you take this out of the oven before it’s baked, you lose that opportunity and it’s gone,” she said.

Webb said, “Right now if we got rid of the sales and use option tax, we would lose $450,000 revenue annually… That could represent a 6 cents increase in the property tax. If KPAA were to take over the town events and marketing, then the tax increase would be reduced to 2.5 cents.”

According to Webb’s projections, for an average person paying $50 in sales and use option tax a year with a $200,000 home (the median home value in Killington), that would mean a decrease of 20 cents a year. For a home valued at $250,000 (the average home value in Killington) that would mean a $12.30 increase a year total.

Projections for how the KPAA would raise the additional $250,000 necessary to produce the events they would inherit under this plan, were less clear.

Assumedly, the KPAA will be able to raise funds through regional business development fees grown by merchant passes being offered to businesses and people outside of town, annual resort membership contributions, event sponsors and private donations.

A special meeting of the EDTC is scheduled for Aug. 25 at 3:30 p.m. at the town offices to possibly adopt a recommendation to be sent to the full Select Board for inclusion on the November ballot.

Cristina Kumka is a freelance correspondent for The Mountain Times, she can be reached at cristina_kumka@yahoo.com.

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