PCMR to City Hall: tax hike is ill-advised | ParkRecord.com

PCMR to City Hall: tax hike is ill-advised

by Jay Hamburger OF THE RECORD STAFF

Park City Mountain Resort in late May took a formal stand against a City Hall tax increase, sending a letter to Mayor Dana Williams and the Park City Council outlining concerns with the idea and making suggestions about how the municipal budget could be balanced without one.

In a one-page letter sent on PCMR letterhead dated May 27, the day of a City Council meeting, Jenni Smith, the resort’s vice president, explains PCMR’s opposition to a tax increase.

In it, Smith challenged City Hall on four points, including the timing of the idea. She said the idea for a tax increase "appears to be rushed through the process" and more time should be spent on explaining the ramifications to property owners. She also asks whether City Hall has made enough cuts to the municipal budget.

Meanwhile, Smith indicates people who own vacation homes and commercial property will "foot the bill." Vacation homes and commercial property are taxed at a rate nearly double that of property that is designated a primary residence.

"Once again, the greatest impact will be on the locally owned/operated businesses and the absentee property owners. Due to the current economic situation, that well is almost dry!" Smith wrote in the letter, which was distributed publicly at the time of the City Council meeting.

In another point, Smith challenges plans for raises at City Hall, saying that the idea "needs careful consideration and deliberation" and "fully funding both the pay plan and bonus plan seems out of touch with the reality of the local business/economic situation."

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"I don’t believe your employees will walk out the door if they don’t receive their expected pay increase or bonus," she said in the letter. "I do believe they will be disappointed, but 90% of them will be happy to still have a job that provides excellent benefits and a pension plan."

She acknowledged that a property-tax increase might be needed sometime later, however.

Smith declined to comment about the letter.

The letter came amid the most difficult budget talks in years at City Hall, with officials faced with crafting a spending plan amid dwindling municipal revenues. Still, though, interest groups have continued to lobby for funding.

Park City Manager Tom Bakaly, at the outset of the budget talks, proposed an ambitious plan to increase City Hall’s portion of property taxes by 6 percent every two years for 15 years. The increases, Bakaly argued, would stabilize the budget since property taxes are less likely to make dramatic shifts that could endanger other municipal revenue streams, such as sales taxes and permitting fees.

Williams and the City Council have since nixed the prospects of an increase in property taxes in City Hall’s next fiscal year, which starts in July.

Bakaly’s original idea for property-tax increases every two years proved wildly unpopular, with rank-and-file Parkites displeased and a state tax watchdog labeling the idea outrageous. A property-tax increase would have been the first by City Hall in at least 20 years.

City Councilwoman Candy Erickson, who has been a wintertime PCMR employee for 21 years, calling in snow reports, said in an interview there are many businesses in the city that agree with the resort’s opinion.

She said she heard more complaints about the idea from people with businesses than from people who own residential property. Erickson said businesspeople in Park City suffered more during the recession than a typical property owner and they pay the higher tax rate.

"Some of them need a year or two to get back on their feet," Erickson said.

The mayor and City Council are scheduled to continue their discussions about the budget on Thursday, with talks set for 4:30 p.m. and a hearing scheduled sometime after 6 p.m. The meeting is scheduled in the City Council chambers at the Marsac Building.