CAPITALIZING ON COLORADO GROWTH

Vail Hopes to Capture Construction Revenue

By Headwaters News, 8-22-07

Vail is booming – and the evidence is everywhere. 

The Denver Post reports today that there are eight huge construction cranes towering over the Colorado town, giving sky high evidence of the now-$2 billion makeover, sparked by Vail Resorts’ $250-million Arrabelle project.

Perhaps that building boom is the impetus for the Town Council’s passage of a resolution to put a new tax before the voters of the mountain burg.

The Vail Daily News reports that the 4 percent tax, which will go before the voters in November, will be imposed on any construction materials used on projects in the city, no matter where the companies buy the materials.

Projections are that the revenue captured by the construction-materials tax could help cure what Vail officials predict will be a $25.8 million capital budget shortfall over the next five years.

Councilman Greg Moffet says that if Vail had passed a construction-use tax five years ago, the town would be in a much better financial situation than it is now.  He also said that the materials tax would better balance the tax burden, given that every Vail resident has to pay a sales tax on groceries.

But Councilman Kent Logan disagreed, and said that if the national housing slump hits Vail within the next few months, voters might be wary of a construction-use tax, vote against it in November and make such a proposal harder to pass in the future.

Vail isn’t the first Colorado town to impose a construction use tax.  Eagle and Gypsum have both approved such a tax, but efforts to impose similar taxes in Avon and Breckenridge failed at the ballot box.

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