Col. Falls meets state benchmark for resort tax

May 9, 2019

The Montana Department of Commerce has determined that the city of Columbia Falls qualifies as a resort community under state law, meaning the city can ask voters to approve a resort tax in the future.

The City Council last fall asked the state to conduct an economic analysis to see if it qualified as a resort community. The city has a population of under 5,500 residents, based on the 2010 census, and an economic analysis found that 25.7 percent of all businesses in the city, both public and private, are either entirely or partially dependent on tourism demand, according to a report by Department of Commerce Senior Economist Joe Ramler.

Ramler based his study, in part, on reports from businesses in the city. The actual numbers they reported are redacted from his study because they contained confidential business information.

Over the course of a calendar year, the study found that 58.1 percent of all basic sector employment was attributed to tourism-related activity, Ramler found.

In his report, Ramler noted tourism traffic through town en route to Glacier National Park is substantial. Nearly 43 percent, or 1.2 million vehicles, travel U.S. 2 from July through September, according to Montana Department of Transportation counters 3 miles east of the city.

That amounts to 62 percent of all the traffic traveling through the park’s west entrance.

The study likened Columbia Falls to Red Lodge, which sees a lot of traffic from people going to Yellowstone National Park. Red Lodge has been a resort community for decades,

The city will take its time in asking voters for a resort tax, City Manager Susan Nicosia told the council Monday night. It’s still analyzing the needs of its fire and police departments.

The summer months are exponentially busy for both departments, as traffic counts surge with tourism traffic. The fire department is especially stretched thin, as it’s an all-volunteer force except for the fire chief. Volunteers often have to respond to several calls in a 24-hour period.

Last fall, the city estimated a 3 percent resort tax would conservatively provide the city with an additional 200,000 assessed value would see a 7 percent city property tax rebate, or about 450,000, the city would have to ask homeowners with a 178 a year, or 65.844 mills. That amounts to a 29 percent increase in city taxes.

In other words, property owners would face having to foot the bill for increased tourism in town and the services it requires, with tourists paying nothing.