La Crosse County voters might have a rare county-initiated referendum on the ballot April 4. The question for voters revolves around a new half-percent sales tax that only applies in businesses designated as tourism related, with proceeds of the tax going to improve county roads.
There’s also a chance the ballot could include a county referendum on a so-called “wheel tax.”
La Crosse County Board members focused a lot of discussion in 2016 on how the county was going to make up ground on road improvement projects. Highway Commissioner Ron Chamberlain has identified almost $90 million in needed road projects, and County Administrator Steve O’Malley suggested that another $5 million in funding for roads would be required to start catching up on county highway work.
Other potential routes to getting that kind of money included major increases in property taxes or borrowing, but board members haven’t seriously discussed those options. Instead, the focus has been on getting state approval to institute a Premier Resort Area Tax.
“We have, I think, worked very hard as a county board to look at many different options in a really difficult set of circumstances,” board Chair Tara Johnson said at Wednesday morning’s meeting of the county board’s Executive Committee. “We are trying to piece together a local solution that works.”
“We’re sort of in an era of bake-sale financing for infrastructure projects,” board member Monica Kruse said.
A Premier Resort Area Tax would raise an estimated $5.8 million per year in La Crosse County, which could be used for a variety of things in addition to road work, including water and sewer infrastructure, civic centers, parking lots, even fire trucks and squad cars. The county intends to focus the proceeds on road work.
Committee members noted that the tax would mean visitors to the county would be helping to fund road improvements instead of putting the county’s share of road costs entirely on local taxpayers. On the other hand, the premier-resort tax is broadly targeted, so it’s not just hotels and explicitly tourist related businesses. The tax would be applied to roughly half of all the goods and services sold that already are subject to sales taxes.
The premier-resort tax option is available without legislative approval to municipalities or counties that have 40 percent or more of their equalized property value coming from tourism-related businesses. Although the state has a broad definition of “tourism related,” La Crosse County wouldn’t even come close to meeting that threshold because commercial property of all types only makes up about 25 percent of the county’s equalized value.
The county’s best bet of getting authorization for the tax approved by the Legislature is to get it in a budget bill, which means if it doesn’t get done this year, the county would have to wait two years. That puts some pressure on county board members to go into the referendum without doing much preparation for community education ahead of time.
While some Executive Committee members expressed reluctance to rush into a spring referendum, all members except Maureen Freedland voted to support a spring referendum on the Premier Resort Area Tax.
“I’d put this up against a wheel tax or any of the other options we’ve considered as the best option with the most bang for the buck,” said Matt Nicolai, who initially pushed for consideration of the tax.
The county wouldn’t be required to conduct a referendum as a precursor to gaining approval from the state, but it would be a signal to state lawmakers and Gov. Scott Walker that there is community support, which would go a long way toward helping the county gain approval. The spring referendum would be an advisory referendum and it’s likely the county would be required by the state to conduct a binding referendum as a condition of state approval for starting such a tax.
No other counties have instituted a Premier Resort Area Tax, and if the county did gain approval, none of the municipalities in the county would be allowed to do it.
The county board, which meets Jan. 19, still needs to approve the referendum before it could go on the ballot. Johnson told Executive Committee members that she might call a special committee meeting before next week’s county board meeting for discussion on adding a referendum on a wheel tax, a special county surcharge on vehicle license fees that board member Mike Giese has long advocated.