Killington Tax Repeal Drew Some Concerns

Vermont Standard 

By Curt Peterson

Standard Correspondent

KILLINGTON – After eight years, Killington voters approved repealing the 1 percent Sales and Use Option Tax, but it wasn’t as popular an idea as one might think.

When the tax was initiated in 2008 the revenue was dedicated entirely to funding events and marketing efforts to expand the resort town into a fourseason destination instead of just an Eastern skiers’ Mecca.

But, according to the Killington Pico Area Association’s website, only about 35 percent of the net receipts have actually been invested as intended. The rest, they say, has been used to pay off debt incurred when the town purchased the troubled Green Mountain National Golf Course, and injected into the town budget in order to stabilize property taxes.

The 35 percent funded the town’s Events and Marketing Department, which was created to fulfill the function of supporting year-round events.

Killington has been sharing its Events and Marketing Director with KPAA – and the office was maintained at the Welcome Center on Route 4 rather than at the town offices, an arrangement some residents objected to.

In fact, Amy Morrison, who was the last permanent Events and Marketing Director, was working 30 hours per week for the town, which made her eligible for benefits, and her KPAA commitment was for fewer hours. If she had worked in two locations – managing and marketing the same events for two different entities – the cost to the town would have been the same. Resentment over “providing an employee for KPAA’s benefit at taxpayers’ expense” was unfounded, but continued to fester in some people’s minds nonetheless.

The Sales and Use Tax is added to nearly all purchases in town – not just meals and hospitality, but utility bills and most retail sales as well. KPAA says the entire Option Tax generates $1.095 million annually, of which the state retains 30 percent, or about $325,000.

Three years ago, in 2014, voters rejected an attempt to repeal the Sales and Use Tax, saying they wanted to see how well Killington Resort fulfilled its promise to support the four-season effort.

According to KPAA, the Resort invested over $5 million over the next three years, constructing mountain bike trails, a thrill ride called The Beast Mountain Coaster, and zip lines, and supporting weekly major events through the Association.

But the subject of repealing the Sales and Use Tax did not come up again until the Resort asked the town to pledge $100,000 to support a 2017 FIS Women’s World Cup Ski Race event, provided it takes place in Killington this November. The 2016 event is credited with enormous economic activity during a normally slow time of the year – $10 million, according to Select Board chair Patty McGrath at a recent Board meeting. The Resort had a $1.2 million net loss for the event, and is soliciting financial support from the town, various companies and organizations, and the state.

The Select Board was in favor of making the commitment. During public discussion, the subject of repealing the Sales and Use Tax arose. Mike Solimano, General Manager at Killington Resort, seized the moment, residents attending the meeting concurred, and the Select Board voted to include repeal of the tax on the 2017 Town Meeting Warning.

Solimano said if the tax was repealed the Resort would not ask the town for World Cup support in the future.

Why would this make a difference to the Resort?

The Resort’s lift tickets and ski-and-stay packages are priced on an “allinclusive” basis – repeal of the tax will drop 1 percent of the sale price to their bottom line, and they are the largest generator of the $1.095 million in tax revenue.

And what do taxpayers gain from this, besides 1 percent relief in the cost of utilities and retail purchases?

For one thing, the taxpayers won’t be asked to finance the World Cup if it becomes an annual event. And, chair McGrath said, the Events and Marketing Department would be “dissolved,” which would eliminate the lingering doubts among opponents of the shared KPAA-town employee.

At the Town Information Meeting on March 6 selectmen Ken Lee, Chris Bianchi and McGrath joined with Solimano to urge voters to repeal the Sales and Use Tax by marking their Australian ballots to do so on Tuesday.

Diane Rosenblum and her husband David made passionate pleas to keep the tax in place.

“We don’t own a business in town,” Ms. Rosenblum said. “So we aren’t really that interested in bringing more business to town. I think we should keep the tax in place and use the revenue to invest in our infrastructure, including the Library.”

She went on, saying that budgets of important town departments had to be cut or limited, while the Select Board was asking voters to reduce revenue.

Jim Haff, who was running against Ken Lee for his selectman position, told voters it was more important to make sure the Sales and Use Tax was repealed than it was to elect him to the Select Board.

Richard Horner, Town Planner and Zoning Administrator, had some reservations about repealing the tax.

“I hope KPAA and Killington Resort will continue to produce the quality events that were supported by the 1 percent tax,” Horner said in an email.

Resident Vito Rasenas, who spoke in favor of repeal at the March 6 meeting, said he’s glad the town will be out of the marketing and events business.

“The resort is professionally equipped for that function, and it and the KPAA members are the primary beneficiaries of those efforts so now they can fund those efforts without coming to the taxpayers with their hands out,” Rasenas wrote.

Killington voters agreed and approved the repeal of the Sales and Use Tax to be effective July 1, 2018. They also passed the proposed fiscal 2018 town budget, which includes the $100,000 commitment to support a 2017 World Cup if it is staged in Killington again this fall.