Grand Lake eyes tax increase
September 13, 2016
Grand Lake could see a sales and use tax (S/UT) increase next year as electors in the high mountain community cast their votes this fall on a ballot measure that could result in a one percent increase in the tax, which equates to a one penny increase per dollar spent.
The ballot measure is intended to increase revenues for the Town government to assist in the repayment of funds the Town intends to borrow to conduct a large scale municipal project, made up a many small projects, which are outlined in the Town's previously approved Streetscape and Wayfinding Signage Master Plans.
Grand Lake plans to borrow approximately 4.3 million dollars, in the form of bonds, to complete the proposed projects. The borrowing of money is contingent upon approval of the S/UT increase. If the ballot measure is not approved this Nov. Grand Lake will not move forward with the proposed projects wholesale and will instead initiate projects on a piecemeal basis as funding is available.
In a recent Town newsletter Grand Lake Town Manager Jim White stated, "Redevelopment of the core of Grand Lake will be done in several years rather than several decades… this is a one-shot effort." White said Grand Lake has not conducted a municipal project on the scale currently being proposed for about 20 years. "This is all in the hands of the citizens now," White said.
The proposed tax increase would change Grand Lake's S/UT from four percent to five percent. According to Town Manger White out of town shoppers account for approximately 65 to 75 percent of S/UT received by the Town with community residents typically paying the remainder. Part of the thinking behind increasing the S/UT for Grand Lake is to shift the cost of the improvements onto visitors rather than residents. In that same vein the Town has not proposed any increases for property taxes.
If approved the additional tax revenues will be applied to repayment of the bonds taken out to fund the projects. The tax increase will sunset, and the S/UT rate will return from five percent to four percent, after the bonds are repaid.
If the ballot measure is approved the Town will borrow funds immediately with any construction scheduled to begin in 2017. The current plan is to begin the municipal projects with repair and replacement of existing boardwalks within the town. Other projects in the queue include streetscapes, improving drainage, storm inlets, new paving, creation of multi-use pathways and beautification of Grand Ave., Park Ave., and the entryway to Grand Lake from US Highway 34 to Triangle Park.
Literature from Grand Lake Town government points out that current interest rates are at, "historically low levels", and that borrowing money is cheaper, in terms of long term repayment costs, when borrowing at low interest rates.
In 2016 Grand Lake is retiring debt from a previous bond. The Town expects the new proposed loan to have payments similar to those being retired this year.
The election in Grand Lake this year is a mail ballot only election. Registered voters within the town should expect mail ballots to arrive in mid-October. Election Day is Tuesday Nov. 8.