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Third Seeley Lake resort tax try might be the last

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A large majority of almost 500 voters in Seeley Lake defeated a ballot issue Tuesday to establish a resort tax, the third time in five Novembers such a measure failed.

There might not be a fourth attempt.

The measure would have established a 3 percent tax on resort and some luxury items. It was defeated 327-171, a margin of nearly 2 to 1. That was even more decisive than defeats handed by 58 percent of voters in similar attempts in both 2008 and 2009.

“I think it’s been put to bed until something changes in the law,” said Walt Hill, who co-chaired the Seeley Lake Community Council’s economic development committee.

The tax measure met more organized opposition this time. Local businesses responding to a straw vote in the summer overwhelmingly disapproved of it. Bulk mailings advocating against it were circulated in the days leading up to Tuesday’s election.

“The resort tax was tied to the sewer, so it was controversial to begin with,” said Don Larson, a former state legislator who led opposition to the tax. “It was purported to be for funding a $16 to $20 million project and it was going to raise $100,000 a year. That wouldn’t have even made a dent in the sewer funding.”

Larson said the tax district was too narrowly drawn and didn’t include the largest businesses in Seeley Lake, Pyramid Mountain Lumber and a regional dealership of snowmobiles and all-terrain vehicles.

“The opposition got articulated and the questions didn’t get answered: Why is it so broadly interpreted? Why isn’t it sunsetting? Why is it going on in perpetuity? Why wasn’t the mill considered in the designation of the tax district?” Larson said.

Hill said the chief opposition stemmed from a law that restricts voting to those who reside in a resort district established by the Montana Department of Commerce in 2007. Business owners who generally reside outside the district couldn’t vote on it, “so it’s quite unfair that way,” he said.

Another situation that needs to be changed, in Hill’s mind, is the inability to exempt residents of the district from the tax, either by rebates or an identification card.

“Their argument was we live here 12 months, the tourists are here for three months, therefore we’d end up paying the majority of it,” Hill said. “That really isn’t true, though. Other communities that have this are showing that 90 to 95 percent of the resort revenues come from visitors.”

By law, it appears that only incorporated communities can provide exemptions for locals. The community council has established an incorporation committee and Hill said the issue will come up. But he acknowledged it’s “likewise not very sellable right now” in Seeley Lake.

The question still looms of how to pay for a new sewer system. Best estimates are the average monthly bill will top $100, something that most people can’t afford.

“The rubber’s going to meet the road on this,” Hill said. “When it comes to a vote people in town are just going to have to decide do you want it or not? The problem is, if they say ‘we don’t,’ it’s likely that somebody is going to come from above us and say we will.”

Seeley Lake has separate water and sewer districts, and the latter is under pressure to develop a community septic system.

Larson was chairman of the water district when a sewer was first considered 20 years ago. On Thursday, he sent a letter to the community council proposing to combine the two districts again and to initiate three separate efforts to help pay for the sewer.

Larson advocated lobbying the Legislature to “tinker” with the state’s $900 million coal tax trust fund to make its interest proceeds more available for community infrastructure projects such as Seeley’s.

He’d encourage U.S. Sen. Jon Tester to support tapping U.S. Forest Service campsites, of which the area lakes have more than 600, “to get some infrastructure money in place for little projects like this across the U.S. that could benefit communities.”

Finally, Larson wants the state Land Board to share proceeds from its cabin lease program. He said the largest concentration of cabin leases in the state is in the Seeley-Swan region, including almost all the waterfront properties on the Clearwater River and many of the shoreline properties on the south end of Seeley Lake.

“I’m saying we need to go to the Land Board and say, ‘Hey, boys, if you’re going to have cabin leases you’re going to have to pony up and help us pay for the water quality improvement,’ ” Larson said.

Reporter Kim Briggeman can be reached at 523-5266 or at kbriggeman@missoulian.com.

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