Sturgeon Bay is the second Door County municipality to ask voters to approve a Premier Resort Area Tax to maintain its infrastructure.
The Common Council voted 6 – 0 (Alderman Richard Wiesner was absent) to ask voters to approve a half cent Premier Resort Area Tax to pay for improvements to its deteriorating city streets.
The move came on the recommendation of the special Ad Hoc Committee on Funding Local Street and Infrastructure, which has been studying the issue since being created in July. The question will appear on the April 3 ballot.
It was just the first step in a long process of implementing the tax, which may be imposed by a municipality or county if at least 40 percent of the equalized taxable property within the municipality or county is used by tourism-related retailers. Sturgeon Bay doesn’t meet that criteria, but it may implement the tax if voters approve and it gets approval from the state legislature.
The cities of Rhinelander (2017), Eagle River (2006), Bayfield (2003), Wisconsin Dells (1998), and the Villages of Stockholm (2014) and Lake Delton (1998) have instituted the tax. The Village of Sister Bay voted last month to send the question to its voters in February.
The tax applies to most goods that a sales tax applies to, such as sales at department stores, clothing stores, convenience stores and florists. It would not apply to automobile sales or groceries.
Committee chair David Ward said the committee preferred the tax rather than a wheel tax, levy limit override, or debt financing since it would spread the cost to the large influx of tourists and residents of other communities who use city roads and infrastructure. A wheel tax would apply only to vehicles registered by Sturgeon Bay residents.
The committee also recommended that the city engage in short-term debt financing to begin improving streets in the months before the new tax could potentially be implemented.
Ward reported that 38 percent of city streets are in fair or poor condition, and more are deteriorating each year as the city falls further behind in maintenance. The city repaves just 1.2 miles of its 67 miles of streets each year, which equates to a 56-year replacement cycle. The committee recommended that the city aim to replace surfaces on a 25-year cycle.
“A street will not last 56 years in this climate,” Ward said.
To get close to a 25-year lifespan the city would need to double its resurfacing and maintenance budget to $720,000 ($620,000 for resurfacing and $100,000 for preventive maintenance). City Administrator Josh VanLieshout said the city estimates the tax would generate at least $500,000 per year.
In August Mayor Thad Birmingham said a new funding source for street maintenance was needed because the city is confined by the cap in levy limit increases instituted by Gov. Scott Walker in 2010.