You can’t always get what you want, at least in Stowe these days, when it comes to using local taxes collected from restaurants, bars and hotels to fund improvements that aren’t necessarily needed.
Those businesses were hard hit by coronavirus, especially in the pandemic’s first couple of months.
Stowe assesses a 1 percent local option tax on rooms, meals and alcohol receipts, which it uses to fund municipal infrastructure improvements that it doesn’t want to fund with local property taxes. In recent years, as business has increased in the tourist town — and as the cost of a beer or a room has gone up — those tax receipts also went up, to the point that Stowe could reliably predict upwards of a million dollars a year.
Town manager Charles Safford said that sum has essentially been cut in half.
“We basically assume no new money for this fiscal year, which has caused us to draw down our reserves,” Safford said.
That roughly half million dollars in local option money will be swiftly gobbled up by bond obligations. The Stowe Arena uses $350,000 of the local option tax revenue each year to help pay down its 20-year bond that was used to build the arena in 2013. The rest, roughly $212,000, will be used toward the annual payments on a $3.2 million bond approved two years ago to remove overhead utility lines in the village.
That doesn’t leave anything else for otherwise non-pressing capital projects.
“At the end of the day, capital projects are what they are, and we have to do what we have to do,” Safford said. “Everyone always assumes things are going to climb, climb, climb, and then you have a correction.”
In April and May, Stowe’s dining and lodging establishments lost huge amounts of business compared to those same months last year, more than 90 percent in rooms and alcohol receipts. Put it this way, the Boston Bruins famously ran up a $157,000 bar tab after winning the Stanley Cup in 2011, which is more than five times the total amount of booze sold in Stowe in April.
Safford said the town anticipated losing half its local option taxes soon after the coronavirus pandemic started shuttering businesses. But, that’s for the 2020 fiscal year. The town is now nearly halfway through the 2021 fiscal year, and budgeting for the next one will be a tricky business, as the recent surge in COVID-19 cases in Vermont sets records just about every time numbers are released.
The fall tourist season was pretty good, Safford said, but it remains a question mark how willing people will be to come vacation in Stowe during the winter, which used to be the busiest time of the year — summer and fall started outpacing the ski season years ago.
“The million-dollar question is how do you budget for the next fiscal year,” Safford said.