Editorial:

When it comes to taxes, specifics are critical

Posted 11/17/20

It came as little surprise this month when Park County voters rejected local governments’ request for an additional 1% sales tax. After all, local voters have rejected requests for general …

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Editorial:

When it comes to taxes, specifics are critical

Posted

It came as little surprise this month when Park County voters rejected local governments’ request for an additional 1% sales tax. After all, local voters have rejected requests for general purpose sales taxes multiple times in the past. This most recent attempt failed with 60.7% of the electorate opposed — almost exactly the same percentage that shot down the last attempt in 2012.

The failure of the tax will put a further strain on the cities of Powell and Cody, the Town of Meeteetse and the Park County government. We expect budget cuts will be coming, including some that won’t be very popular with local residents.

But we have to wonder if some of this could have been avoided if local leaders had given more serious consideration to pursuing a specific purpose tax instead of a general one. Recall that, in 2016, some 53% of voters agreed to temporarily raise the sales tax by a penny to fund $13.68 million worth of specific infrastructure projects around the county.

Back then, local government leaders said they would have preferred to get a general purpose tax, but they saw the writing on the wall. A survey they commissioned in the spring of 2016 found only 48% of residents would definitely or probably support a general purpose tax — and the consultant who led the survey warned it likely overstated the support by as much as 10 percentage points.

Simply put, there’s little indication that Park County voters want to approve a general purpose tax. So it was surprising when the Powell, Cody, Meeteetse and county leaders announced earlier this year that they would seek one, without holding any significant public deliberations or formal periods of public input.

Certainly, there are good reasons for wanting a general tax instead of a specific one. To varying degrees, the municipalities and the county government are all experiencing budget crunches, and the shortfalls are coming within their general budgets. It’s not so much that they need funding for specific projects; they just need more money to provide everyday services and maintenance. And by law, specific purpose taxes can only be used on whatever projects are listed on the ballot and they remain in place only until the specific amount is raised; so if a new problem pops up, the funding can’t be shifted.

To help reassure and inform voters about how their tax dollars might be used, Powell and Cody leaders released fairly detailed lists of how they would spend the money, though county commissioners balked at providing detail. Commissioners wanted to retain some flexibility and they believed that getting too specific would essentially turn the general purpose tax into a specific purpose tax.

The problem, though, is that voters want detail. They want to see exactly how their tax dollars will be used.

A couple days after the election, Park County Commission Chairman Joe Tilden said in an interview on KODI that “the money is the same” between specific and general purpose taxes and that this tax’s failure indicated that members of the public simply “don’t trust local governments to spend our money wisely. And that to me is very discouraging.”

To be sure, many voters just aren’t comfortable with sending local governments more money unless there’s a specific plan on how to use the cash.

But government leaders should also remember this: When voters approved the specific purpose tax in 2016, the $13.68 million was fully collected and the tax was over in two years. In contrast, the general purpose tax was expected to bring in roughly $28 million over a span of four years.

And then there was the COVID-19 pandemic and associated public health orders that have wreaked havoc on the local, state and national economies. There are few people who feel they have cash to burn at the moment.

On KODI, Commissioner Lloyd Thiel noted that the campaign for the tax came late in the process; thousands of people had already cast their ballot before a pro-tax group, A Penny for Park County, really got going in the weeks before the election.

Tilden said local leaders may get together over the winter and figure out whether they want to try seeking a specific or general purpose tax in a future election.

“Personally, I would like to see us go to a general purpose tax again, and maybe try a little bit harder to inform the public,” Tilden said on KODI. “Because a specific purpose tax is great, but it doesn’t free up general fund dollars.”

Thiel noted that governments can use specific purpose taxes to cover general expenses if they’re listed on the ballot, but “it’s a shell game. And it’s deceiving the people.”

We disagree. Taking general fund expenses and putting them into a specific purpose tax would involve shuffling money around, but it’s not some kind of trick, because voters will know exactly where their dollars are going.

We hope local leaders reconsider the ways they might be able to put together a specific purpose tax that covers critical, everyday items. Why not pull together a package that contains a set amount of dollars for the roads and bridges in the greatest need of repair, the additional law enforcement personnel needed in schools, the capital projects that have been put off for years, etc.?

Local residents have spoken at the polls — and they like details. It’s possible that a couple years of unpleasant budget cuts will change the public’s mind about a general purpose sales tax, but if not, local governments would do well to get specific.

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