Resort tax for infrastructure bill clears the Senate

Supporters celebrate, look to the House

The momentum for Senate Bill 241, an effort to allow Montana’s resort tax communities to vote on an option to raise their resort tax rate by a percent to fund infrastructure projects, continues to build in Helena.

On March 18 Montana senators voted 33 to 16 in favor of SB 241, with one senator excused. 

“All 10 of the communities are extremely excited about this. It was a good vote,” said Big Sky Resort Tax Board member Mike Scholz, who sits on the legislation subcommittee for the board. 

Sponsor Sen. Jeffrey Welborn (R) Virginia City explained SB 241 to senators in the second reading before the vote. 

“Infrastructure funding is an issue that is challenging most tourist impacted communities and areas throughout the state,” Welborn said. “Due to the small year-round populations and the influx of tourists there is a disproportional burden placed on a few residents to provide public, health, safety and community services to the much greater number of seasonal visitors. This bill would allow those communities to increase the resort tax by a favorable vote of their local voters by up to 1 percent additional. Once a project is complete, that additional 1 percent terminates.” 

Sen. Brian Hoven (R) Great Falls who spoke critically of the bill while in committee by explaining he didn’t like the broad definition of infrastructure, stayed his course and spoke against the bill on the Senate floor, outlining that his disdain was mainly rooted in resort communities being able to create a tax “on other people and use the proceeds to improve their own community and reduce their own property taxes.” 

However, he was in the minority, as proponents outnumbered opponents to the bill by greater than 2-1. 

Scholz said while proponents of the bill have made it past the first steps, the House Taxation Committee and the House will be the next major hurdles. 

If it makes it that far, Scholz said he doesn’t foresee opposition from Gov. Steve Bullock. “There’s not a fiscal note, no expense to the government at all, so there’s no reason to think that would be a problem at that level,” he said while also cautioning that “you never count your chickens before they hatch.” 

Scholz also said SB 241 supporters’ strategy is unlikely to change. “We’ll just go at it like we did with the Senate and work with our lobbyist and promote our same positive story that resonated with the Senate. It’s not Big Sky’s story,” he explained. “It’s the story of all 10 resort tax areas. It affects us all and all of them have thrown their support behind it. Those 10 are spread out in a lot of different districts.” 

The idea is that the 1 percent uptick could significantly help communities struggling with infrastructure and eyeing necessary big-ticket projects. Red Lodge is looking at $100 million in costs for infrastructure updates, with West Yellowstone and Big Sky likely looking at around $50 million each for water and sewer upgrades. 

“When it’s voted on you know specifically what infrastructure it’s paying for and what it costs. The term can only be as long as the authorization of the resort tax. Right now resort tax is for 13 years. You can’t have it extend longer than the original,” said Scholz. “When that infrastructure is paid for, that tax is retired.”

 

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