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2023 RESORT TAX BALLOT INITIATIVE VOTER INFORMATION WHY IS THERE A PROPOSED CHANGE TO THE CITY’S 3% RESORT TAX? Due to the shortage of affordable community housing detailed in the 2022 Whitefish Housing Needs Assessment and the recommendation to ask voters to approve a portion of the City’s 3% resort tax for community housing development and programs in the City adopted Whitefish Community Roadmap (Roadmap), the Whitefish City Council directed staff and the Whitefish Community Housing Committee to draft a plan identifying how funds from resort tax would be used for community housing. The City Council adopted the Community Housing Plan: Resort Tax Report with the following key points: • The proposed re-allocation of the 3% resort tax is intended to help move community housing development projects and programs forward. • It is proposed that 10% of the 3% resort tax be designated specifically for community housing development projects and programs starting February 1, 2025. Over 20 years, this is estimated to generate around $27 million. • The Haskill Basin Conservation Easement bond will be paid off by January 31, 2025, opening up more funding to be utilized in other areas of the City. Streets, paths, parks, and the Whitefish Trail will all continue to see increased funding. • All Resort Tax Fund expenditures will be approved on a project-by-project basis by the City Council. • Securing resort tax as a funding mechanism for community housing will start the pursuit of other funding opportunities such as grants, philanthropic contributions, and business community buy-in which will further leverage funds provided by the resort tax. WHAT IS THE PROPOSED CHANGE TO THE CITY’s RESORT TAX? The proposed change is limited to the voter authorized uses of resort tax collected by the City. The ballot language would allocate the 3% resort tax starting, February 1, 2025, as follows: • 25% for property tax reduction for taxpayers in the City; • 48% for the repair, maintenance, and improvement of streets, storm sewers, underground utilities, sidewalks, curbs, and gutters; • 10% for community housing initiatives including the development of deed restricted affordable housing units and community housing programs; • 10% for improvements and maintenance of bicycle and pedestrian paths and other park acquisitions, capital improvements, and equipment; • 2% for the maintenance and replacement of existing improvements of the Whitefish Trail with any amounts not expended within five fiscal years available for the maintenance of City bicycle and pedestrian paths; and • 5% to be retained by merchants for the administration costs of the resort tax. ---PAGE BREAK--- Specifically, the proposal is to reallocate the resort tax to include 10% for community housing initiatives. IF PASSED, WHAT WILL THE 10% FOR COMMUNITY HOUSING INITIATIVES BE USED FOR? The specific uses of the 10% for community housing initiatives are detailed in the Community Housing Plan: Resort Tax Report. Like the other resort tax uses, the Whitefish City Council must approve the specific projects and programs funded by resort tax within the authority granted by the voters. WILL THE AMOUNT SPENT ON STREETS DECREASE IF 10% IS ADDED FOR COMMUNITY HOUSING? Compared to the current allocation effective through January 31, 2025, the proposed allocation of 48% of the 3% resort tax will provide additional funding above what is spent on streets today. See the Community Housing Plan: Resort Tax Report for more information. WILL PROPERTY TAX RELIEF FROM RESORT TAX CHANGE? No, the ballot language keeps property tax relief at 25% of collections derived in the prior fiscal year. WHAT HAPPENS IF THE 2023 BALLOT INITIATIVE FAILS? If the ballot initiative does not pass, the November 2021 voter approved 20-year extension and uses of the 3% resort tax starting February 1, 2025, will remain in effect. WHAT CHANGES WERE APPROVED BY VOTERS IN NOVEMBER 2021? Voters not only approved extending the resort tax to January 31, 2045, during the 2021 election, but also approved a new allocation for the use of funds collected from the 3% resort tax. Voters approved language to allow for more flexibility and provide a funding source to maintain existing infrastructure that may not need a full reconstruction, such as a street or bicycle path overlay/patching. Furthermore, the additional 1% approved in April of 2015 was allocated to other uses including an increase in the percentage of revenues dedicated to streets, bicycle paths and park improvements, as well as support to maintain the Whitefish Trail. The 2021 voter approved allocation of resort tax revenues derived during the preceding fiscal year included: • 25% for property tax reduction for taxpayers in the city; • 58% for the repair, maintenance, and improvement of streets, storm sewers, all underground utilities, sidewalks, curbs, and gutters; • 10% for improvements and maintenance of bicycle and pedestrian paths and other park acquisitions, capital improvements, and equipment; • 2% for the maintenance and replacement of existing improvements of the Whitefish Trail with any amounts not expended within five fiscal years available for the maintenance of City bicycle and pedestrian paths; and • 5% to be retained by merchants for the administration costs of the resort tax. ---PAGE BREAK--- WHAT IS THE VOTER HISTORY OF RESORT TAX IN WHITEFISH? In 1995, Whitefish voters approved a 2% resort tax for a term of twenty years, from February 1, 1996, through January 31, 2016. Since then, Whitefish voters have approved extensions and changes to the resort tax in three separate elections. At the November 2, 2004, municipal election, voters approved an extension of the resort tax through January 31, 2025. A special election was held on April 28, 2015, with voters approving an increase in the resort tax rate from 2% to 3% for additional property tax relief and to fund the purchase of the Haskill Basin Conservation Easement to protect and preserve water quality and quantity. The vote passed by a margin of 1718 to 334 and the 1% increase was effective July 1, 2015. Most recently, in November 2021, voters overwhelmingly approved a 20-year extension of the resort tax to January 31, 2045, with an 89% approval rate. Voters also approved a new allocation for use of funds collected from the 3% resort tax, effective February 1, 2025. WHAT ITEMS ARE CONSIDERED TAXABLE UNDER RESORT TAX? The ballot initiative does not change what items are taxable under the City’s 3% resort tax. Generally, all luxuries shall be taxed, and "luxuries" shall mean any gift item, luxury item or other item normally sold to the public or to transient visitors or tourists; but the term does not include food purchased unprepared or unserved, medicine, medical supplies and services, appliances, hardware supplies and tools or any necessities of life. A list of taxable and exempt items can be found in the Whitefish Municipal Code, Chapter 3: Resort Tax.