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Council divided on sales tax issue

Staff Writer

This week’s joint work session for the Pagosa Springs Town Council and the Archuleta County Board of County Commissioners was canceled at the last minute due to technical difficulties, but the silver lining is the town now has more time to determine its official position on the sales tax issue.

As it turns out, not everyone on the council is ready to toe the line when it comes to appeasing the BoCC.

Since the April election changed the composition of the council, the town and county have put substantial effort into creating better lines of communication, meeting several times to discuss “matters of mutual concern,” as described in the agendas for the work sessions.

While the two groups have vowed to meet every two weeks and have mentioned several items they would like to work on together, the one issue that has dominated the conversation so far has been sales tax.

Since the first joint work session, commission chair Clifford Lucero has pushed for getting a question on the November ballot asking the voters to approve a 1-percent increase to the sales tax collected throughout the county.

Several councilors reluctantly agreed, pointing out several ideas, from town sidewalks to county roads, for ways to spend the extra collections. However, council member David Schanzenbaker asked why there was a need to raise taxes when Michael Branch, the town’s auditor, has suggested the town’s budget already has more money in reserves than it needs.

Schanzenbaker’s question was finally answered at the June 24 work session, when Lucero admitted there was an “elephant in the room.” As it turns out, the hidden agenda behind the county’s push for a sales tax increase was a fear that the community recreation center idea might come back up again next year.

The question before town voters on this year’s April ballot was whether or not sales tax should be raised on only those businesses located within town limits, with all the proceeds from this extra tax going exclusively towards building a town rec center. While this initiative was soundly defeated at the polls, despite a considerable campaign, proponents of the idea vowed at the time to bring the idea back again next year, and to continue to bring it up until it finally passes.

Historically, although a majority of the sales tax collected within Archuleta County comes from businesses located within the town limits of Pagosa Springs, those revenues are split evenly between the town and county governments.

One of the arguments against the rec center proposal was that people who live in the unincorporated areas of Archuleta County still have no choice but to shop at those town businesses. In other words, they would end up paying the tax even though they had no chance to vote on it.

According to state statutes, there is a limit to how much sales tax can be collected by local governments, so getting a sales tax question on the November ballot would do two things. First, it would give everyone in the county a chance to decide, not just those who live within the town, and second, if it passed, it would block any future attempt to raise taxes exclusively for the town, whether it be for a rec center or any other town need.

At the June 24 joint work session, Lucero admitted there would be no need for the county to push for a sales tax increase if the town would promise not to pursue its own exclusive sales tax increase in the future.

Resolution 2014-09, which Interim Town Manager Greg Schulte presented at the July 1 town council meeting, was “a resolution indicating the desire of the town council of the Town of Pagosa Springs to work collaboratively with the Board of County Commissioners of Archuleta County in regards to exploring a sales tax increase.”

According to this resolution, the town would agree to do four things:

• Participate in regularly scheduled meetings with the BoCC to explore an increase in sales tax.

• Make staff available to provide information, data and advice regarding sales tax.

• Support the county in placing advisory questions on the November ballot seeking feedback from the electorate concerning a possible sales tax increase.

• Not pursue a sales tax increase for the sole benefit of the town for the calendar years of 2015 and 2016.

“In the joint meeting with the county commissioners,” Schulte explained, “at least one of them said the gorilla in the room was the county wanted an assurance from the town that we would not go off on our own and seek a sales tax increase that would benefit just the town.

“Obviously, this is a commitment on behalf of this town council, but it does not in any way limit the ability of the citizens to place a tax increase on themselves through the normal initiative process.”

While the resolution before council was designed to prevent the county from moving ahead with a campaign to increase countywide sales tax in November, there was some opposition to the agreement, both from certain councilors and from members of the public.

When Mayor Don Volger asked if any council member had comments on the resolution, councilor Kathy Lattin was the first to speak up, “I have a huge problem with it.”

Lattin was one of the leaders of the community task force that proposed and advocated for the rec center idea.

“I know when we were talking,” Lattin explained, “they were asking us in good faith not to do a sales tax increase in April (of next year) and we told them we didn’t have anything planned for doing that, but for them to come back now and say they want a commitment from us for two years to stall anything in the town — that we as a council …will wait for the Board of County Commissioners to come forward in a November (election) — we’re holding ourselves hostage to the county.”

“Just as a clarification,” Schulte responded, “the language that’s in there for the period of the calendar years of 2015 and 2016, that was something I wrote; that was not what the county commissioners suggested … I don’t want it thought that the county came forward and said, ‘We want these.’ That’s not correct.”

“I put my two cents in on that also,” Volger added, “because it would take a special election anyway, and we have no intention of doing a special election for a one cent sales tax increase within the next year, anyway, so I thought it was a reasonable olive branch to extend to the county. It wasn’t their recommendation; it was our showing good faith that this council does not intend to go for our own sales tax and not divide it with the county.”

While council member Tracy Bunning explained his reluctance to back a sales tax increase for the county’s November election, especially since the town’s reserves are so flush, councilor John Egan went one step further.

“I don’t want us leaving this room thinking the county is trying to stick us somehow,” Egan said. “The county has not tried to stick us at all; this is something we put together. We need to remain cognizant of that or we will be heading down the road towards bad relations.

“I do see the point of this resolution and I wish in our nice little community that a handshake was sufficient, and I think we gave that handshake at our meeting the other day … However, if it seems that a document is necessary, then let’s put the document together in such a way that the county participates, so they have some skin in the game, as well.”

Egan suggested if the town agrees to not put a tax increase question on the April ballot, then the county should pledge not to put the question on the November ballot. Schanzenbaker agreed, and Schulte suggested changing the legal notice for July 8 from a work session to a meeting so that both the town and county could vote on some sort of mutual agreement to that effect.

As it turned out, that work session was canceled because of technical problems related to how it was noticed — the town’s public notice said the meeting would be in Town Hall, while the county’s notice said it would be at the courthouse.

Council member Clint Alley said, “My only real concern is having a resolution saying we agree to get along and work together seems a little bit strange to me. We should all just want to do that because that’s our job.”

“I’m good with one, two and three,” Lattin referred to the document in front of her. “Like you said, Clint, it’s ridiculous that we have to have a resolution saying we will get along, but I am not whatsoever okay with number four. I think that puts the town in a bad situation …

“Who knows what’s going to happen between now and April? Something could happen where we would need to do something, where we would need to act. With this, we are tied for two years. We would have to have the public come to us to do our job. This is tying our hands, this is binding us down, and I will not agree to it.”

Volger suggested tabling the resolution until the council could have further discussions with the county, and then he opened the discussion up to public comment, recognizing that audience member Mark Weiler had raised his hand.

Weiler began by correcting Schulte — the correct expression to describe a situation where no one is willing to verbalize an obvious yet uncomfortable fact is “an elephant in the room,” not a gorilla.

Weiler then said, “They’re asking you to bind your community to something with nothing in return. It is illogical. They’re asking you to become as dysfunctional as them. They have not presented any ideas for helping the community. They think they might want to do something with roads, but in the fifteen years I have lived here, I have heard that. There was a ballot initiative at one point that was passed, but that they played a bait-and-switch with. You have a history of people who do not put the community first.

“That has not been this council’s history. I may have disagreed with some of the previous council members, but I have never thought for one minute that they wanted to slow things down to the point of doing nothing. Please don’t do this.”

Weiler, along with Lattin, was one of the leaders of the task force pushing for the rec center idea that failed in April.

ed.fincher@pagosasun.com

This story was posted on July 10, 2014.