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Monetizing Tourism for the Local People & the Product

NOTE: The tourism & recreation committee is representing our local business members by researching various new tax proposals  coming to the next session of Montana's Congress. This web page will be continually updated based on input and feedback from local Park County businesses and citizens, and our elected officials. At this time, no business, coalition or individual is endorsing any particular position. So, relax. This is just a dialog right now. We believe both local Chambers (who receive funds from the existing Bed Tax) should take a similar unemotional, rational approach to this issue. If you care about your property taxes, your way of life, and/or this place we call home, we think you'll be interested in joining us in this important decision.

People the world over come to Montana, and Park County especially, for its wide open spaces, wild waters and rural way of life. Today, Montana has a one-sided business model for capturing that revenue: namely, bed taxes that are largely used for “marketing Montana” and go in to the general fund. This approach doesn’t serve the tourism industry well enough. Montana can build a better business model that not only keeps tourists coming, but protects the product that they are coming for, and creates affordable living for those who call Montana home. If we don’t adjust our tax system for gateway counties, the Montana we grew up in will disappear. There won’t be affordable housing for those working in the service industry. Property taxes will accelerate to the point that only wealthy out of stater’s will be able to afford the most pristine places. Family run agricultural businesses will disappear, becoming sub-developments or trophy ranches. And county emergency and public services will be overwhelmed with seasonal tourists…and the county then turns to property tax increases to fund the need. It’s vicious circle where only the wealthy survive.

Rather than sit here and ride it out, we Montanans, especially in the tourism business community have an opportunity to create a long-term plan and business model that preserves our product and our way of life. Our tax system must be part of that business model. This doesn’t have to be about increasing the total tax to local Montanans. In fact, we believe it can instead be money given back to local citizens to improve their quality of life.

As business owners, we don’t think of this as a tax; rather it is a capital investment and an ongoing operating expense that we use to run our businesses. We can use the tax revenue to enhance the product (i.e. Montana’s open spaces, wild places and rural way of life); for example, investing in land trusts or invasive weed programs. We can use the tax as an operating expense to invest in my employees by creating affordable housing or materially reducing property taxes. We can use the tax as operating expense to fund critical services for ourselves, our guests and our employees…such as sheriff and emergency response services.

There are several tax proposals coming to light in Helena to address these issues: sales tax, local option taxes, changes to the resort tax, increasing the bed tax, special funding to tourism-centric counties (which still comes out of taxes). Ultimately, those of us in the tourism industry can engage in a dialog with elected officials to solve these problems, and, more importantly, create a sustainable tourism business model. Our businesses are the ones that generate the revenue for these tax plans. Our businesses stand to benefit by helping Montana families, our employees, our guests, and just as importantly, the “product” of Montana that we monetize. We call upon our tourism industry and elected officials representing those businesses to change the public narrative from a “tax” to an “investment”. We owe it to our State and ourselves to engage in the dialog and build a new business model for Montana tourism.

None of us as businesses are particularly interested in new taxes. Nor are we interested in a tax that we don’t have a say in how it is spent (e.g. the Bed Tax model). Nor are we interested in a tax on our businesses that disappears in to the state general budget. But we all believe it is foolish for the state to not re-balance taxes to take advantage of our tourism economy. Montana’s current tax model isn’t working in tourism centric economics like ours. Local citizens are carrying an unfair burden; and that in turn is effecting our businesses. Park County has roughly 16,000 citizens BUT over 4 million people (mostly tourists) travelling through Livingston’s corridor and roughly 1 million travelling up through Paradise Valley and Gardiner in to YNP. This puts a burden on county services and infrastructure, that impacts our guests and employees and ourselves. It also drives up housing prices, and hence property taxes and affordable living for our employees and the elderly. It also impacts our rural way of life (e.g. both terrestrial and aquatic invasives). But, even more simply, it is foolish for the state NOT to monetize tourism for both its citizens and businesses. People are travelling to this beautiful product of Montana. They come for its open spaces, clean water, wildlife and rural way of life. We can all make our economy and way of life more robust if we leverage the tourism economy in front of us. We have been walking away from money people are willing to pay. For that reason, IF Montana citizens decide to vote for a sales tax, we support a thoughtful, locally-controlled sales tax mechanism that acknowledges the role and impact tourism plays in our gateway economies. In fact, we don’t even think of this as a “tax”; from a business perspective, it is a “capital and operating expense” investment in to the product of Montana tourism. And the financial numbers we are looking at would have a material return on investment to the local community and its businesses.

 

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