Ponderay proposes bed tax

PONDERAY - Residents will be asked on Nov. 2 to vote on a proposed 5-percent tax for short-term stays at motels and hotels in the city.

"This is not going to cost the residents of Ponderay a dime," said Mayor Carol Kunzeman, emphasizing that the only people subject to the bed tax would be motel and hotel guests who stay here for less than 30 days.

If approved by the city's registered voters, the bed tax is anticipated to raise about $170,000 in its first year if the current economic climate persists.

The funding generated by the bed tax would be used to pay for transportation infrastructure improvements and recreational amenities within the city.

The city's proposed streets budget, for instance, is $150,000, according to city Planner Erik Brubaker.

"It's going to help us in a lot of ways because there's not very many ways that a city can generate income like this," said Kunzeman. "It takes quite a bit of money to get roads repaired, so we do the best we can. But this $170,000 would certainly help."

The decision to groom a local option tax for the ballot comes nearly 18 months after the city put a proposal on hold to impose a half-cent sales tax to help pay for infrastructure improvements and government services.

Ponderay merchants strongly opposed the sales tax increase due to concern that it would drive away their customers and create a general impression that goods and services cost more in the city.

Kunzeman said the proposed bed tax has won the support of the Sandpoint Area Lodging & Tourism group.

"They are very supportive of what we're doing and we got their support first before we decided to go forward. They believe that it would make this playing field more even with other motels in the area," she said.

Voters in the city of Sandpoint agreed to a 5-percent bed tax in 2002. Efforts to implement a bed tax in Sandpoint in 1989 and 1992 were unsuccessful.

State law requires that 60 percent of a city's voters must approve the new tax before it can be enacted. Only residents of Ponderay can cast ballots on the measure.