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Resort tax reallocation can do more for residents

| July 19, 2023 1:00 AM

The City of Whitefish is preparing to place a reallocation of its resort tax revenues on the ballot this fall. Recently, voters overwhelmingly voted to extend the city’s resort tax for another 20 years, beginning in 2025, with 89% of votes cast in favor of the tax. The proposed reallocation, sent to the city council by the Whitefish Community Housing Committee, would dedicate 10% of the city’s resort tax funds to community (affordable) housing development projects and programs, like rental assistance. It could generate $27 million over 20 years, or about $1.35 million per year. This funding is a great step forward, and you should vote in favor of it this November regardless of its final form. However, the city can do better, and it should do so sooner than later.

This additional 10% for affordable housing is made possible as the city will no longer be paying a bond for the Haskill Basin Easement, which will be fully paid off when the reallocation takes effect. Currently, 23.33% of resort tax revenues are used to pay for this bond. The city should increase the percentage allocated to community housing to 20% by also diverting 10% from the property tax rebates currently provided to homeowners. I’ll explain.

Whitefish currently uses 25% of its resort tax revenues to provide property tax rebates to property owners, though state law only requires that 5% of resort tax revenues be used in this way. When the resort tax was first passed in 1995 with only 56% of voters casting their ballots in favor, this was likely necessary. In 2023, the value of our resort tax is well understood. Over the past 30 years, we’ve seen more homes in Whitefish be purchased as second homes, investments or as short-term rentals – a trend that accelerated during the pandemic. A 2022 city report found that 39% of homes in Whitefish have owners that are from out of the area. Many of these homes are significantly more expensive than the homes owned by full-time community members, so it seems fair to say that more than half of these property tax rebates, which total more than $2 million per year, are flowing out of Whitefish rather than helping our community and residents.

These rebates are administered proportional to property value, meaning that one home owned by someone with a Park City, Utah address was given $7,400 by the city in 2022. Meanwhile, the average full-time Whitefish community member gets relative pennies. On my block of Kalispell Avenue between Ninth Street and Riverside Avenue, which is fully occupied by full-time residents who are both renters and homeowners, the average rebate was just $238 in 2022. Our tax dollars should help our most vulnerable community members, not subsidize the purchases of our most wealthy. The current system does the opposite.

Though I’m advocating for a smaller pot of money for property tax relief in exchange for more money for community housing, I’m not advocating for higher property taxes for most people in Whitefish. The math is simple with one small change. Whitefish should evenly distribute the remaining 15% of resort tax allocated to property tax relief. By doing so, most property owners in Whitefish would stand to gain. Rather than receiving less than $300 to offset property taxes in a year, an even split of this smaller pot of money would likely provide more relief to most homeowners while limiting the portion of our tax dollars that are subsidizing McMansions, AirBnBs and ultimately leaving the area. The city has the numbers and should do the work to calculate and publicize them – and we should demand that our resort tax dollars be used to build a richer community, rather than continuing to hollow out the one that we have.

Nathan Dugan is a candidate for Whitefish City Council and the President of Shelter WF.