Sales tax is seen as a top funding option by the RTA Formation Committee to fund regional transportation authority that could cost $10 million annually, but other options are on the table.
A Yampa Valley Regional Transportation Authority could cost between $9 million to $10 million per year, according to an estimate shared by consultant Bill Ray with the Yampa Town Council last week.
Ray said the Formation Committee of elected officials is considering a sales tax to generate the funding needed for an RTA, though other funding options are being considered as well. A one-cent or 1% sales tax applied across the boundaries of the RTA — all of Routt County and the city of Craig — would generate about $12 million a year, he said.
“The committee is considering a sales tax somewhere I would say between a half-penny and one percent,” Ray said. “But there has been no final decision on that.”
Last week’s meeting in Yampa was part of the first round of public hearings at the governing boards of every jurisdiction that could join the RTA. Steamboat Springs and Hayden also held meetings last week, while the Routt County and Craig held their first public hearing on Tuesday. Oak Creek will hold its first public hearing on April 10.
A second round of these hearings in April will hope to see each municipality approve an initial intergovernmental agreement to form an RTA. This agreement will likely continue to change through the summer as consultants work to gather public feedback. Governments will consider a final intergovernmental agreement in early August, which will include finalized routes, ballot questions and funding sources.
The current pace would have voters across Routt County and in Craig to approve the formation of an RTA in November, as well as a funding mechanism like a sales tax. Alongside that question, voters in Steamboat Springs will likely consider other funding mechanisms that hope to help the city rely less on sales taxes. Steamboat Springs City Council is currently taking steps to diversify revenues and is on track to ask voters to consider both a lift tax and a vacancy tax this fall.
In a work session on Monday, Routt County Commissioner Angelica Salinas noted that the addition of a sales tax to support an RTA seemed to be at odds with longtime goals to diversify revenues that have historically been dominated by sales taxes.
“Our community is so sales tax dependent and we’ve talked for years about the need to diversify the revenue stream into the city,” Salinas said. “Yet, here we are again putting one more thing on the back of sales tax.”
Salinas said that while Steamboat Springs is the economic hub of Routt County, residents have expressed a desire to have less tourism over the last five years.
“How can you add more stuff to the back of sales tax and also simultaneously say but we also want less people coming here,” Salinas continued. “I think that these are very valid concerns when we think about the viability of an RTA going through this year… I want this to pass very badly, but I do have concerns and if I have these concerns and I am in the loop on this project, what is the general public going to think.”
As the Routt County Commissioners held their public hearing on Tuesday, Salinas again questioned if pursuing a sales tax was wise. Steamboat Springs City Council member Michael Buccino said he has received some comments from people asking them to consider a property tax instead of a sales tax, though that has already been ruled out by the formation committee.
“The formation committee right now has already said property tax is pretty much a no go, but I’m starting to hear some other people saying why not,” Buccino said.
Commissioner Sonja Macys, who represents Routt County on the formation committee, said that looking at what funding mechanisms are available to an RTA, sales tax has made the most sense. Sales taxes collected by an RTA would not be assessed on items like groceries or utilities.
“Sales tax has been landing as the most promising financially and possible and particularly saleable,” Macys said. “I think it has been process of elimination and really thinking about what is going to get the funds that are needed, what is potentially saleable, what is potentially fair across the board.”
Officials in Yampa expressed concern about a potential sales tax as well, pointing to a sales tax increase voters in the town recently approved to fund upgrades to the sewer system. Goals for the RTA include some level of bus service in South Routt, but there are few details on what that would look like so far. Ray said he would have better information for Yampa's next meeting. Some members of the public in Yampa questioned whether it would be worth taxing themselves to get that service.
“Every time you turn around people want that sales tax for this and that and everything else,” said Yampa Town Board member Ken Montgomery. “Sales tax is a good source of revenue, but pretty soon the consumer is going to hit a cap on what they can do.”
In addition to sales taxes, the formation committee is looking at funding options like a motor vehicle registration fee, service fees like bus fare collected by the RTA and potential federal or state grants.
Steamboat Ski & Resort Corp. has also said they are willing to contribute toward an RTA, funding that may come as part of a lift tax being considered in Steamboat Springs. A lift ticket tax is technically not an allowable funding mechanism for an RTA, but the city could dedicate a certain amount of funding from a lift tax to go toward an RTA.
Oak Creek will hold its RTA public hearings on April 10 and April 24. Craig will hold its second public hearing on April 8, Routt County and Steamboat Springs are holding theirs on April 15, Yampa on April 16 and Hayden on April 17.