Although the Star Valley council did not make any decisions at Tuesday night’s council meeting, they came to a consensus that the rental tax should be eliminated if possible.
At a work-study session, council members hashed out ideas over eliminating the town’s two-percent privilege tax on leasing or renting property. Many felt the tax targets low-income residents, often forced to rent in the town’s trailer parks.
“I have never been for this thing,” council member Gary Coon said.
“Taxes are a bad thing, the only thing worse is an unfair tax and it is unfair that people who rent get taxed for renting.”
The tax currently brings in around $50,000 or 12 percent of the town’s operating budget. Council member George Binney proposed axing the tax, given the fact that the town reportedly saved $100,000 when it combined the town manager and attorney positions.
“I think we can give it back to the people and not be hurt,” Binney said.
“We just cut around $50,000 for an overpriced manager.”
Council member Barbara Hartwell said she would like to know what effect eliminating the tax would have on the town.
“If the town does not need it, then I am in favor of getting rid of it,” Hartwell said.
Town manager Tim Grier said the town is facing two large expenses in the next fiscal year, renewing the police contract with the Payson Police Department and the increasing costs of processing photo enforcement tickets.
“It is a safe bet that the police contract will cost an additional $160,000 or more,” Grier said. “So that is going to have an impact and the Intergovernmental Agreement with the courts for processing photo enforcement tickets is going to increase.”
Star Valley’s current contract with the PPD to provide response to calls is $258,000. If a new contract is signed for $418,000, that would be an increase of 62 percent.
Several months ago, Star Valley began recruiting for its own officer to respond to calls for service in the hope of lightening the load on PPD and possibly convince its neighbor to extend the contract.
Combine rising expenses with a decline in state-shared revenue and the two-percent rental tax could have a sizeable impact on the town’s budget.
Mayor Chuck Heron said he would hate to have to implement a property tax in the future if the town is not bringing in enough revenue to cover expenses.
“I know if we drop that (rental tax), we will have to pick it up somewhere else,” Coon said.
Heron suggested the town revisit the topic after more data is collected and the next fiscal year’s budget is further along.