HELENA — The Montana Legislature is considering legislation that would allow resort communities that have opted for a local sales tax to use the money the tax raises for workforce housing.
Current law only allows communities to use resort tax revenue for infrastructure projects, like roads or public safety.
In the House of Representatives, House Bill 162 would expand infrastructure to include workforce housing for lower-income residents under the resort tax law.
In the Senate, Senate Bill 172 would both add workforce housing as an accepted use of resort tax revenue and increase the population limit for the areas defined as resort communities to accommodate for population growth in Montana.
The resort tax was first established in Montana in 1985 to mitigate the effects of tourism on local communities.
While tourism can contribute to resort towns’ economies, Sen. Dave Fern, D-Whitefish, described the industry as a “double-edged sword,” since tourists do not pay taxes that help with building and maintaining infrastructure or public safety.
Fern is carrying SB 172 and said since the Legislature passed a law in 2019 that allowed resort towns to ask voters to collect an additional 1% on certain sales, it’s been popular with towns like his home of Whitefish.
“I think that is because you can see progress. You see infrastructure changes. You see significant improvements on roads, sidewalks, some shared use paths and that sort of thing. And you get property tax relief,” Fern said.
But resort communities are now facing housing shortages as well, particularly housing for the workers who keep the tourism industry spinning.
According to data from the city of Whitefish, in 2022, 57% of their workers commuted from outside the city.
Jake Brown from Shelter Whitefish testified for the bill at its initial hearing Wednesday. Brown said the bill will aid in addressing the housing crisis in Montana.
“I think this bill is just going to give local jurisdictions a little bit more flexibility in dealing with the scope of these issues,” Brown said.
SB 172 would also expand the population that can be considered resort communities and resort areas.
For resort areas, which are currently defined as unincorporated areas with a population of 2,500, the population would be expanded to 3,500.
For resort communities, the required population would be increased to include all towns in the second or third class of towns.
This effectively means the population cap is increased to 10,000.
Fern said this increase will more accurately reflect the current population of Montana.
“Population increase in the state has been substantial, and it’s just time for an adjustment,” Fern said.
Emma White is a reporter with the UM Legislative News Service, a partnership of the University of Montana School of Journalism, the Montana Broadcasters Association, the Montana Newspaper Association and the Greater Montana Foundation. White can be reached at emma.white@umconnect.umt.edu.
