McCall voters will be asked on May 20 to approve a new 10-year local-option tax to fund street improvement work in the city.
The McCall City Council approved the ballot measure during its regular meeting last Thursday. If approved by 60% or more of voters, the tax would replace the city’s current streets tax, which will expire at the end of this year.
The new tax would increase the current tax’s levy on short-term rental and motel stays from 3% to 4%. The 1% general sales tax that excludes groceries would remain the same.
Since 2021, the streets tax has earned about $2.9 million per year. The 1% tax increase on short-term lodging is expected to raise that total by about $350,000.
Inflation cited for increase
The lodging tax increase was framed by City Manager Forest Atkinson as a way to keep up with inflated construction costs without raising costs on city residents.
“It’s become a lot more costly to maintain the transportation network that we have,” Atkinson said. “So that increase would help offset the increase in cost of construction, and that one is primarily born by visitors to the community so it doesn’t fall on residents.”
The potential uses for the tax funding are broad, but all relate to street improvement work, transportation infrastructure, and stormwater management.
Local housing
Language for the renewed tax would also allow it to be used on street improvements, sidewalks, and stormwater drainage infrastructure associated with local housing projects.
That money would count toward the $10,000 credits the city currently offers to developers who agree to deed-restrict housing units for use only by people who live and work in McCall.
The city also plans to develop a five-year plan to outline projects to be funded by the tax to show voters what the money would do. That plan would be updated annually by the city council.
An online survey conducted by the city in September showed that most respondents supported increasing the lodging tax, but not the 1% sale taxes.
About 69% of the survey’s 438 respondents supported the lodging tax increase, compared to about 12% who supported increasing the sales tax. Another 12% said neither tax should be raised.
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Streets tax history
The streets tax was first adopted by McCall voters in 2015. Since then, the tax has earned about $17.8 million, nearly a third of which was spent rebuilding streets and sidewalks in downtown McCall.
The tax was also a primary funding source for rebuilds and maintenance of other city streets, including Commerce Street, Idaho Street, and Spring Mountain Boulevard.
Before the streets tax, city street projects were funded using grant money or property taxes paid by city residents.
From 2011 to 2015, the city had about $510,000 per year for city street projects, equipment replacement and facilities improvements, according to city budget documents.
