Montana Towns Argue for Resort Tax Hikes


Thomas Duesing  / Flickr

West Yellowstone is one of the gateway resort towns of Montana whose workers are being priced out of homes. Thomas Duesing / Flickr

Skift Take: Booming traffic, or overtourism, to Montana's scenic jewels, such as Yellowstone and Glacier national parks, is stressing the small gateway towns.

— Sean O'Neill

The small gateway towns to Montana’s scenic icons, including Yellowstone and Glacier national parks, want state lawmakers to give them permission to raise local resort town taxes as much as 1 percent so they can pay for road and well upgrades and finance housing for local workers, supporters said Tuesday.

The town of West Yellowstone, a popular entry point to the part, desperately needs new water wells to meet tourism demand so it can permit construction of new hotel rooms and give provide workers with affordable housing, town manager Daniel Sabolsky told the Senate Taxation Committee.

The town has about 1,200 residents but hosts thousands of visitors daily with a stressed water supply that forced local officials to order a development moratorium until the water issues are fixed.

“If we have to build a wastewater treatment plant. We can’t just build it for 1,200 people. We have to build it for 10,000 people,” including tourists, Sabolsky said, adding that the plant could cost about $20 million.

Officially designated Montana resort towns have their resort taxes capped at 3 percent but the bill sponsored by Sen. Jeffrey Welborn, a Republican from Dillon, would allow them to seek voter approval to raise the cap to 4 percent, provided the additional 1 percent helps provide “workforce housing and related needs or community development.”

The special sales tax could apply to goods and services bought at gift shops, restaurants, and hotels — but each community can specify what goods and services will be taxed in their area.

The bill’s critics said the towns’ existing money is sufficient and suggested more scrutiny is needed on how tax revenues are being spent.

“That bill is no more about affordable housing than it is about increasing the resort tax by 30 percent for whatever purpose the resort tax board determines,” said Big Sky resident Jerry Scot, a former member of the Big Sky Planning and Zoning Advisory Board, among other community panels.

Approval of the bill could give the community of Red Lodge east of Yosemite as much as $250,000 annually to help finance $100 million in planned projects.

“We have no delusion — it’s going to take a long time to get through all that deferred maintenance,” Schoenike said.

Officials in Big Sky, which has some of the state’s highest median home prices, officials said they would likely use extra local tax revenue to subsidize home purchases for working families.

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