THE BUZZ: Presentation Without Taxation

By on December 8, 2015

Officials stall on best approach to fund housing and transportation.

The escalating START budget, along with the Housing Authority’s rising costs, has elected officials sweating. (Photo: maintenance design group)

The escalating START budget, along with the Housing Authority’s rising costs, has elected officials sweating. (Photo: maintenance design group)

Jackson, WY – Civic leaders continue to struggle with the best approach for funding their commitment to provide for future housing and transportation needs in the valley. Monday’s joint meeting with town and county leaders bogged down once again on a potential tax hike to bring in revenue. A board of eight — both the town and county had one person missing — split between an added penny of general sales tax or a special purpose excise tax (SPET) approach to funding the Community Priorities Fund. Signs that the wheels were coming off the bus, however, began cropping up before the vote was ever taken.

STARTing off

A presentation by START Bus leaders that painted a foreboding fiscal future should the Integrated Transportation Plan’s goals be realized muddied the waters at the onset. Capital expansion, more buses and drivers and ongoing maintenance and salaries come with a price tag — one that startled some elected officials.

“By 2019, START is running in the red,” public works director Larry Pardee told the panel at the meeting. “And it goes up exponentially. It’s kind of scary, but you set a big target in the ITP, and you are going to have to put some big money behind it to achieve those.”

START leaders were optimistic that their $15 million wish list, presented at the meeting, could be partially covered by federal grants.

“We received very good news from the federal government when they passed and signed on Friday increases in funds for transportation. We may be seeing opportunity for more funding from the feds,” said START director Darren Brugmann.

Councilman Jim Stanford — who has been a vocal advocate for using sales tax to fund housing and transportation because of SPET’s inherent inability to be used for ongoing operational expenses — grilled Pardee on anticipated escalation of the START budget each year as the transit system grows.

“You’re looking at an increase of $500,000 a year in operational costs. This expense is not covered by anything right now, correct? And it can’t be covered by SPET,” Stanford stated.

Councilman Don Frank hinted that expansion goals for START might not be the most prudent course if they can’t get people to ride.

“Creating the opportunity for use is only one part of the goal,” Frank said. “Getting people to take advantage of increased service is another thing. Your predecessor [Michael Wackerly] thought that would be a difficult thing to do.”

During public comment, citizen Jim Lewis echoed Frank’s concerns.

“Transportation is a huge issue, and I hope I’m not speaking out of turn, but Councilman Frank asked the right question,” Lewis said. “I’m worried about this ‘fund it and they will come’ approach. The question is how do you change the behavior to get people to ride? Especially with gas prices where they are now. Just because you have more buses doesn’t mean people are going to ride them.”

Brugmann admitted ridership was not something he could control.

“In everything we do we are making assumptions. It’s difficult to do,” Brugmann said. “We are transporting less, currently, in this calendar year even with increased offerings. Will changes translate into ridership? We hope so and think so, but we aren’t sure. My goal is to change behavior. We believe transit can reduce the level of traffic on the road.”

Frank questioned potential improprieties concerning Jorgensen and Associates’ work on preparing costs analysis for START.

“These documents have been prepared by Jorgensen. Have they been paid for their services? And going forward the numbers will now be prepared by someone not standing to bid on future contracts?” he asked.

Pardee assured Frank that START was looking for an independent construction cost adjuster from Salt Lake City.

Housing Authority operational expenses are also expected to increase by $240,000 next year, according to county administrator Alyssa Watkins. The annual budget for the authority is $400,000, but town manager Bob McLaurin said that does not include additional hires, including a new director/manager.

The Housing Authority’s SPET wish list totaled $17 million, $15M of which was earmarked for construction costs.

“The 15 is for what?” commissioner Paul Vogelheim asked.

“Primarily the Grove,” Watkins answered.

More bad news

If doom-and-gloom budget projections from START and the Housing Authority weren’t enough to sour officials with money woes, McLaurin made the sky fall with a presentation of 17 potential organizations and projects eager to get a shot at SPET money. The ‘Christmas’ list total comes to $148 million. A penny of SPET tax generates about $11.5 million, annually.

Vogelheim worried that community wants and needs were outpacing dwindling revenue sources.

“We heard the governor saying state funding is going to be cut by 50 percent at least. Municipalities in the state are selling off their plow trucks and equipment to make payroll,” Vogelheim said. “Things are changing throughout the rest of the state, and we are looking at these ‘asks’ and trying to sort out what is critical.”

McLaurin agreed.

“We’ll know the first week of March where we are, but it’s going to be a substantial reduction for sure. We are going to be somewhere between zero and 90 million [dollars]. Even if we get $90 million, we want all of that going to operations. We have to pave and plow roads. We have to respond to 911 calls. Other costs are going up as well — Fire/EMS, public safety,” he said.

Taxing issues

Looking at three possible revenue sources for housing and transportation — sales tax, lodging tax, and property tax — authorities quickly dismissed a property tax as a long shot. Legal questions about using lodging tax money for housing quieted discussion on that approach, though councilman Bob Lenz was miffed as to why it wasn’t being more fully explored.

That left sales tax. Civic leaders are divided on several fronts concerning the better funding source for the Community Priorities Fund.

General sales tax could be used for ongoing operation and maintenance expenses. Some elected officials worry an added dedicated penny of sales tax might be a tougher sell to the public than a SPET ballot measure. Despite assurances from town leaders that a penny increase in sales tax will indeed be dedicated to fund housing and transportation, nothing prevents current or future government officials from changing their minds or making balance sheet ‘adjustments.’

A SPET ballot item is perceived by some elected officials as being more palatable to the public because it would more clearly define and ensure where taxpayers’ money would go. It’s considered a short-term fix, however, and funds generated could not be used to pay salaries or make repairs. Officials have the option of putting housing and transportation projects on the SPET ballot while including additional community needs, but it’s unlikely much would be left after town and county needs.

Before tackling which tax to choose, commissioner Natalia Macker asked her peers to consider an official resolution establishing a Community Priorities Fund. Commissioner Mark Newcomb agreed, but the idea hit a wall with Lenz.

“I’m not worried about whether we have a fund or not. You don’t have a fund until you have money to put in the fund,” he said.

How they voted

County commissioners favored a general sales tax approach with a 3-1 vote, Vogelheim opposed. Town council members split 2-2 on the approach, deadlocking the joint board with no decision. A special joint meeting is being scheduled. Commissioner Barb Allen was absent from Monday’s meeting. She has leaned toward SPET in past discussions. Councilwoman Hailey Morton Levinson is on maternity leave and is not expected to participate in the vote.

Sara Flitner (SPET): “I honestly do not have strong feelings one way or another about SPET or general. In listening to outside sources I hear a great appetite for both. But I think we have a few trust building exercises with the public to do first. I want to have as few obstacles as we can between us and the voters.”

Bob Lenz (SPET): “People are looking for earmarked money and that sounds to me like SPET. General sales tax is too open. Electeds have a way of spending every penny you give them.”

Don Frank (General): “We have $131 million in all SPET requests. They are not all fundable. Increase in demands are a certainty. Revenue decline is a probability. I’m going to support extending the sixth cent.”

Jim Stanford (General): “The town has a very strong and long track record of fiscal discipline. I reject the argument that we can’t be trusted to budget accordingly. As far as the argument future councils will not be bound [by our decisions today] — that’s how democracy works.”

Paul Vogelheim (SPET): “I’m a fan of SPET. I much prefer the accountability in it. Taxpayers deserve to know where their money is going.”

Smokey Rhea (General): “The one cent tax gives us a little more time to get the right projects.”

Mark Newcomb (General): “If we stick with SPET, we will fail with operational expense in terms of transportation and housing.”

Natalia Macker (General). PJH

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