Sandpoint council adopts ballot language for 25-year, 1% local option tax

By Zach Hagadone
Reader Staff

When Sandpoint voters go to the polls in November, they’ll be asked whether they support levying a 1% local option tax on their purchases — with funds dedicated to supporting citywide street infrastructure improvements — after members of the City Council voted unanimously on Sept. 4 to approve the ballot language for the measure.

The question on the ballot will read: “Shall the City of Sandpoint, Bonner County, Idaho, adopt an ordinance providing for a 1% local option sales tax to be implemented and effective from January 1, 2025, through December 31, 2049?”

If approved by 60% of voters, the tax would apply to “all sales, except occupancy sales subject to taxation” under Idaho Code.

While the exact amount of revenue to be raised from the tax is unknown, Sandpoint Mayor Jeremy Grimm said that “assuming a 2.5% annual increase in collections, by 2026 we might be collecting $3 million a year. Looking at total collections over this period, it’s reasonable to think we might collect around $55 million.”

Photo by Ben Olson.

Based on those estimates, the 1% LOT could meet the price tag for rehabilitating streets to national standards and generate another $12 million for improvements and maintenance of sidewalks and pathways, as well as gravel and grading for alleyways.

In addition, having the LOT in place to specifically fund street, sidewalk, pathway and alley infrastructure would free up the approximate $500,000 the city dedicates to that work each year from the general fund. As a result, that $500,000 could be reallocated to other areas of the city budget in need of additional dollars. 

“I believe this is our best opportunity to create a dedicated street-funding revenue source,” Grimm said. “Although it’s difficult to determine exactly the rate of growth of our retail sales over the next 25 years, what we do know from 2021 is that the retail sales in June, July, August and September jump significantly, attributed to visitors to our community.”

Regardless of the ultimate amount of funds raised from the tax, City Hall stated that revenues would be earmarked for:  

• Street pavement, sealing, widening, reconstruction and associated stormwater infrastructure.

• Sidewalk/pathway improvements, including maintenance and reconstruction and extensions to provide connectivity and increase ADA accessibility and safety. 

• Gravel and grading of alleyways. 

• Property tax relief to Sandpoint property owners. (Per Idaho Code, any excess revenue received will be placed in a designated property tax relief fund.) 

• Administrative costs and direct costs to collect and enforce the tax. (The city will retain the actual cost of collecting and administering the tax.

Following the Sept. 4 vote, the city transmitted the language to the Bonner County clerk for inclusion on the November 2024 ballot. 

“Thank you so much council members. I am excited to see what our constituents have to say about this,” Grimm said.

Council President Deb Ruehle has been skeptical of the 1% LOT as presented by the mayor. At both the Aug. 14 and Sept. 4 meetings, she questioned the 25-year sunset on the tax. Grimm made it a point in a prior interview with the Reader, as well as statements to councilors, that the long-term nature of the tax is by design. 

Idaho Code stipulates that “resort cities” of no more than 10,000 population are able to leverage the local option sales tax as a revenue-generating mechanism. Once that population level is exceeded, the LOT tool is no longer available. 

According to the most recent U.S. Census, conducted in 2020, Sandpoint is still just below the 10,000-population threshold — however, that number has certainly grown over the past four years and will in all likelihood exceed 10,000 when the next census is completed in 2030.

Grimm said establishing the tax for 25 years will position the city to reap the revenue benefits far into the future, even after Sandpoint passes the point when its population forecloses the possibility of instituting another LOT. 

Meanwhile, the Legislature has the power to alter those population limits, or even eliminate the resort city taxing authority altogether. 

“I would just put it out there in front of the council that I don’t feel like the mayor has thoroughly answered what other city services may be in dire need by the time we get 25 years down the road and we’ve used all of this just for streets and sidewalks,” Ruehle said on Sept. 4. 

“And I am such a proponent for sidewalks, pathways and all the other pieces — and I’m not necessarily against this — but the idea of maybe having $55 million down the road sounds pretty tasty toward a sewage treatment plant that is going to cost the taxpayers increased fees — significantly, month over month, in their utility billing,” she added. “So again, I’m just asking you to process, ‘Are we having tunnel vision here?’” 

In response, Grimm said that dedicated revenue sources already exist for sewer and water through utility rates, while parks are supported through a capital improvement fund and recreation fees.

“When I think of other infrastructure, the only infrastructure that I hear about every day that we don’t have a dedicated funding source — or enough [funding] — for is our roads,” he added.

Councilor Joel Aispuro agreed with the mayor’s arguments, saying that it’s unclear how the Legislature may or may not address the resort city tax during the next session, and putting in place the LOT sooner than later would be a “safeguard” for establishing ongoing funding.

“Roads are in my opinion the lowest-hanging fruit. In my experience, roads are talked about more than anything,” Aispuro said, later adding, “roads seem like the easiest target for me that can make people happy and free up extra capital. Perfect? Probably not. There’s other things that absolutely need help. I think the election year is a great sample size where we can get the loudest voice from our citizens that would give us a good picture … of what we need, if we need to go back to the drawing board.”

Council members negotiated over specific language — including whether to include alleyways.

Councilors Kyle Schreiber and Pam Duquette were especially leery of including language related to alleys, fearing that it would obligate the city to provide an additional service. Overall, Schreiber cautioned the council about overspending on improvements.

“[I]f this fund is solely dedicated to streets and we have this new funding source for streets and we go out and build a bunch of streets, well the useful lifespan of a street is about 25 years. So what happens when this fund sunsets in 25 years and now everything that we’ve built over the past 25 years needs to be rebuilt and we don’t have any funds for that?” Schreiber said. 

“While I still do support this initiative, I think it’s really important that we spend this money wisely and don’t just go and build every street in town with the expectation that that’s going to last forever, because it won’t,” he added. “In 25 years we very well might be back in this exact same situation.”

With the ballot language approved and filed with the county clerk, the next step for City Hall is to educate voters on the ballot measure. Grimm promised an informational flier containing questions and answers about current infrastructure conditions and revenue, as well as interviews with local media and presentations to Sandpoint groups and organizations.

“I’ll stand out there next to a pothole and say, ‘No money to fill this,’” he said. “It’ll take a lot of education and work, and hopefully we get some feedback; hopefully it passes, and if not, we’ll learn and keep going.”

Find the full ballot measure and other supporting materials related to the 1% local option tax in the agenda packet for the Sept. 4 meeting of the City Council at sandpoint-id.municodemeetings.com .