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Olsen

Mackay residents decide May 21 whether to implement a resort tax to help pay for city services that are lacking adequate revenue, according to the city’s mayor.

Voters who live within the city limits can cast ballots from 8 a.m. to 8 p.m. that day. The polling place is the South Custer Rural Fire District office.

The question they face is whether to implement a 3 percent tax on lodging fees, including motel rooms and RV spaces; liquor by the drink; food served at restaurants; and the rental of recreation equipment including golf carts or clubs, ATVs or jet skis. At least 60 percent of voters must say yes for the measure to be approved.

Earlier this year Mackay Mayor Wayne Olsen and City Council members declared Mackay a resort city. Idaho cities with fewer than 10,000 residents and economies that rely mostly on tourism can declare themselves resort cities and implement a resort tax of up to 6 percent. If approved, the Mackay tax would be in place for 10 years with the option to renew it.

City leaders say revenue from the tax would let them catch up on street repairs and better maintain streets in the future, make upgrades to parks and the airport and help offset emergency services costs. If the tax is approved, the council must budget specific dollar amounts for specific items in the city budget where the money would go. If more money is collected than is budgeted in any given year, the council can’t spend the extra money on anything else. It must be placed in a fund and used for property tax relief in Mackay. City officials estimate the tax could generate $20,000 per year.

Mackay officials conducted three public meetings in the last four months to explain the tax and answer people’s questions. Olsen said the first two meetings “had fairly good participation, for Mackay.” The third meeting drew just two people. City leaders learned at those meetings that the word “resort” caused some residents to worry, Olsen said.

“They said they didn’t want Mackay to be like Sun Valley or Ketchum,” he said. Once they understood the reason for using the word resort, that was no longer a concern, he said. The tax is also called a local option tax.

Many of the meeting attendees simply didn’t like to hear that any new tax was being considered. Again, after they learned the specifics of what would be taxed, most of them were not opposed, Olsen said.

“They said, “Oh, OK, you’re not charging it on gas or groceries,’” he said, and that eased some of their concerns.

To put the 3 percent into perspective, Olsen points out that if a Mackay resident spends $1,000 a year in Mackay on food or liquor by the drink or to rent recreational equipment or stay in a motel, that person would spend an extra $30 for the resort tax. But, he counters, few Mackay residents rent a hotel room in Mackay or rent recreational equipment there. He acknowledges that people who eat in a restaurant or have a drink will pay the additional tax. He also points out that like Idaho’s lodging tax, people who park an RV in Mackay for the entire summer won’t pay the resort tax. It’s assessed only on stays of 30 days or less in a motel or RV park.

Rather, Olsen says, the tax will mostly be paid by people traveling through and to Mackay who spend money on the things that will be taxed. That’s critical, he said, because those folks use Mackay’s streets, parks and emergency services, yet they don’t pay the property taxes that pay for all those services.

The tax will let Mackay “get some help from people who come and use these services. They will help pay for it,” Olsen said.

Initially, Olsen said he heard mostly negative comments about the tax, but since people have learned more about it, many “have come around to support it.” There are naysayers, no doubt, whose minds won’t change, he said.

No date has yet been set to start collecting the tax if it’s approved. Olsen said he and the council didn’t want to make that decision before the election. If it’s approved, Mackay city officials will work with tax officials from the state to set the start date and notify businesses.

Olsen asks Mackay residents think about a simple question before they vote. “Is the city of Mackay worth $30 to you?”