Killington Voters May Scrap Sales Tax

Vermont Standard

1/26/17 

By Curt Peterson

Standard Correspondent

killington – It took the killington Select Board just one week to reconsider the possibility of rescinding the one percent sales tax portion of the town’s Options Tax, a change that may save the killington/Pico Resort up to $400,000 a year.

On Jan. 17 the Board approved unanimously a special Warrant asking voters to repeal this levy on most retail sales within the town, and to change the real estate tax payment plan. Voters will decide on the measure at Town Meeting in March.

One week earlier, following the Jan. 10 Board meeting, Select Board member Chris Bianchi and Select Board chair Patty McGrath said the Resort charges for many of their products and services, such as ski lift tickets, on a gross price basis that includes all taxes. If those prices remain the same, and the one percent retail sales tax is rescinded, the difference will accrue to the Resort, significantly increasing their revenue.

Resident Jim Haff raised the sales tax repeal at the earlier meeting during a discussion of a Select Board proposal to commit $100,000 to support a 2017 Women’s World Cup ski event if the Resort can convince the International Ski Federation (FIS) to hold it in killington again this year.

The 2016 event drew 30,000 additional visitors during a November weekend that is usually lackluster for killington businesses. Bianchi called the event a “home run” and advocated helping the Resort defray expenses of a successful redux.

According to Resort President and General Manager Mike Solimano, Powdr Corporation, the killington/Pico Resort’s parent company, underwrote the 2016 event at a net cost of $1.2 million, and he’s soliciting financial support from the town and regional businesses so they can afford to make it an annual attraction to the ski resort town.

“We obviously can’t bear the burden of that kind of costs by ourselves year after year,” Solimano said.

The options tax, which applies to hospitality, meals and alcoholic beverages, as well as the one percent sales tax on general retail transactions, were approved by voters to fund economic development. Bianchi said it was enacted with the understanding that the Resort would “step up to the plate,” and he believes they have.

“Much of the increase in options tax revenue over the past couple of years,” Solimano said at the Jan. 10 meeting, “was produced by summer events sponsored by the Resort.”

He also pointed out that much of the funds raised by the options tax were used to finance debt payment for the Green Mountain International Golf Course and to cover expenses that arose from Tropical Storm Irene, and were not reinvested in economic development.

The town has recently completed an 18-month financial year as a step in converting from calendar-year to fiscal-year budgeting. In 2016 the 18-month budget included anticipated options tax revenue of $1.3 million, Bianchi said, and the figure actually reached $1.463 million. In prior years the option tax revenue had been approximately $875 thousand.

Select Board member Ken Lee pointed out the 2018 budget proposal is almost complete and required an enormous amount of work by several people. He didn’t think the one-week the Board has to rework the budget to accommodate a change in the options tax and hold necessary public meetings was realistic. Bianchi and Solimano, as well as residents Vito Rasenas, David Rosenblum, Haff and others, all vocal advocates of rescission of the sales tax, seemed resigned to waiting a year to take it up.

One week later, “Mr. Lee moved to change the tax payments from four to three per year and to rescind the one percent retail sales option tax effective July 1, 2018,” according to the minutes of the Jan. 17 meeting. The proposal will be presented to the voters in a separate warrant for their approval at Town Meeting in March, which provides time to have the public hearings and to adjust for the change in revenue for the 2019 budget.

Meanwhile, Bianchi told the Vermont Standard, the $100,000 commitment for expenses of a possible 2017 Women’s World Cup event will remain in the 2018 budget as a line item. This means if the voters turn down the Cup contribution, they will also be turning down the rest of the budget, which carries some risk.

He estimates the contribution line item adds about 1.3 cents to the tax rate. If the money isn’t spent for any reason, it will finish the budget year as a surplus.

“Or,” Bianchi said, “If we find out the event isn’t going to be here, we could have a special meeting, remove the line item and reduce the budget, lowering the tax rate by 1.3 cents.”

Vito Rasenas, who has been in touch with Solimano, said the Resort will not ask the town for funds if FIS chooses another venue, or if the 2017 event is cancelled due to weather conditions. At the Jan. 10 meeting, Solimano said weather is always a risk when producing a skiing event, but the Resort and Powdr Corporation were confident enough to take the risk, given the odds.

Asked if he was happy with the way things turned out regarding rescission of the sales tax levy, selectman Bianchi said, “It’s time to give the voters a chance to voice their opinion on this topic.” Following Lee’s successful motion the Sherburne Volunteer Fire Department and the Board met in executive session regarding a prospective site for their proposed new firehouse. The minutes indicate the Board “recommended that the Fire Department Facilities Review Committee continue to work on the proposed fire station site.”