By Amanda Eggert
EBS Senior Editor
HELENA – Proponents and opponents of Senate Bill 343, which would allow resort tax communities to vote on a 1-percent increase on collections for affordable housing efforts, came out in force at the bill’s March 14 public hearing.
The Senate Taxation Committee met in a fourth-floor room of the Montana State Capitol building that was too small to accommodate robust public comment on the legislation, forcing most of those who turned out to follow the proceedings via video feed in an overflow hallway.
This was the public’s only opportunity to participate in a hearing on the bill, which was introduced by Sen. Jeffrey Welborn, a Republican from Dillon.
A total of 18 people spoke in favor of the bill, with seven advocates giving longer, in-depth commentary, and the remainder keeping their comments brief due to the 40-minute time restriction.
Proponents expounded on the need for housing, touted the bill’s local option component and attempted to dispel concerns about existing resort tax collections.
The bill has the support of commissioners from Gallatin and Madison counties, three members of the Big Sky Resort Area District Tax Board, and mayors and city managers from other resort areas in the state.
Mona Jamison, who serves as the Big Sky Resort Area District’s legal counsel and has been lobbying on behalf of the bill, said Montana voters who’ve had the opportunity to implement a resort tax in their community have chosen to do so. “In those 10 [resort communities], from Big Sky to St. Regis, the qualified voters have approved it. That says something.”
If passed, SB 343 would expand existing taxing ability. Big Sky voters could increase resort tax collections from 3 percent—the current tax rate on “luxury” goods and services —to 4 percent, but only if qualified voters approve it.
West Yellowstone’s Town Manager Daniel Sabolsky said his community is struggling to stem the loss of young professionals due to housing issues. “We have a constant turnover in school teachers, paramedics, dispatchers [and] police officers,” Sabolsky said. “It’s not a good way to run a government or a business.”
One of the most impassioned testimonies came from Paulina Hazen, who said Big Sky workers are regularly forced out of their homes to make room for vacation property rentals. She said the “Penny for Housing” bill represents a “defining moment” in Big Sky’s trajectory.
“[Big Sky] is not able to support people like myself who operate key community and business roles,” said Hazen, adding that the three-bedroom unit she lives in just went under contract for $409,000. Even if Hazen and her three roommates combined all of their incomes, they would not qualify to purchase the condo at the asking price, she said.
She said people like herself are considering leaving Big Sky for areas with more affordable and stable housing options—and they’ll take their knowledge bases, tax dollars and community leadership roles with them if they leave.
Opponents were also given 40 minutes to make their case, and four people—all of whom live in Big Sky—spoke against the bill. Their concerns ranged from the broad language of the bill to the question of whether or not Big Sky’s housing issue would be better served by an incorporation effort.
Lisa Knorr expressed concern that the bill would place an undue financial burden on the community. “We must live within our means,” Knorr said. “[SB 343] puts a bigger burden on those already collecting the tax, as well as the community as a whole.”
Alan Shaw said he feared the increased tax would drive Big Sky shoppers 40 miles north to Bozeman where there is no resort tax.
Shaw also said the largest employers in Big Sky should be responsible for housing their workers, and pointed to Big Sky Resort as one entity that’s doing just that. He expressed frustration that the Yellowstone Club, Spanish Peaks Mountain Club and Moonlight Basin don’t house more employees on their property. “Why do they not do more? They have the property to do exactly what Big Sky and Boyne are doing at their own expense,” he said.
Shaw also questioned some of the BSRAD tax board’s recent funding projects and recipients, arguing that the community has not done enough to prioritize its needs. Specifically, he called into question funding for the Gallatin Valley Snowmobile Association, a skating rink in Big Sky Town Center, the Gallatin-Big Sky Weed Committee and Montana Land Reliance.
Mike Scholz, a BSRAD tax board member, addressed that concern during the Q-and-A segment of the hearing, saying that the tax board funds projects that would be covered by a municipality in an incorporated community. “If we don’t do it as a resort tax [board], it wouldn’t get done,” Scholz said.
Jerry Scott said the bill doesn’t adequately specify what constitutes affordable housing, and community development is too broad and could be used for projects of dubious merit.
Brian Guyer, the acting director of the Big Sky Community Housing Trust, said the language is intentionally broad so each resort community can adapt the law to reflect their needs when they put it before voters.
Tallie Lancey, another longtime Big Sky resident, argued that the area’s affordable housing shortage would be best addressed by incorporating as a community, which would open up other resources. “We cannot tax our way out of this problem,” Lancey said. “If we are going to be serious about our housing, we in Big Sky need to be serious about the feasibility of incorporation.”
David O’Connor, chair of the Big Sky Chamber of Commerce Board of Directors, said incorporating across county lines to include both the Gallatin County and Madison County areas of Big Sky would require a change in the law—an effort that was unsuccessful when it was attempted about a decade ago. He said he supports incorporation, but he’s worried that even if it’s successful, it will delay affordable housing by up to 10 years. “As a father and a neighbor and a mentor … I fear it will be too late,” he said.
The committee did not immediately take action on SB 343. If it makes it out of the taxation committee, it will go before a vote on the Senate floor. If it makes it through the Senate, it would still require approval from the House to make it into law.