In a preview of an agenda item slated for the next Mammoth Lakes Town Council meeting on Wednesday, June 6, Assistant Town Manager Marianna Marysheva Martinez released an informational report on the Results of a Taxation Study prepared by financial consultants FTI Capital Advisors.
According to the agenda bill, the Town engaged FTI Capital Advisors to prepare an analysis of the Town’s current tax burden and the impact of the potential tax increases. The analysis was necessary to assess the feasibility of increasing taxes (with voter approval) to generate revenues to help satisfy the Town’s debts and obligations, including the litigation judgment of Mammoth Lakes Land Acquisition (MLLA).
In part, FTI’s report concludes that the current level of taxation within the Town is already high, the Town’s population is generally not wealthy, and the Town’s economy is not likely to sustain additional tax burden.
“The welfare of the resident population is inseparably linked to the competitiveness of the ski resort and the derived demand for all facilities existing because of it, including all related real estate,” the report said.
FTI went on to suggest that, “On a long-term basis, the economy of Mammoth Lakes has been stagnant, and on a near-term basis in decline; nor is recovery expected in the foreseeable future. Imposition of added taxes not serving to finance improvements in municipal services or investment in growth could only exacerbate these problems and make recovery that much more unlikely.”
“Even a tax whose proceeds are spent in the economy (not a reasonable assumption in this case) would reduce that economy’s growth.”
In the report, some of the data cited pointed out the pitfalls of trying to pitch a property-based parcel tax: “Mono County residents are already burdened by an average per capita property tax rate that is the fourth highest among all counties in California. Increases in Mammoth Lakes’ property tax payment delinquencies over the last several years [are] evidence of residents’ growing inability to shoulder the existing burden, much less a heavier one,” the report noted.
And FTI said that impacts on citizens’ abilities to sustain new taxes come down to two circumstances: The first of these is Mammoth Lakes’ large percentage of low-income households The second factor is Mammoth’s “geographic isolation and consequent high cost of living, the latter reducing local purchasing power quite significantly.”
A recent survey conducted showed that Mammoth Lakes’ local cost of gasoline and basic grocery items relative to average costs in other “West Urban” markets, as calculated by the United States Department of Labor, Bureau of Labor Statistics (BLS), showed the town pays about 13 percent more for petrol and as much as 40 percent more on groceries.
Council meets at 6 p.m. in Suite Z of the Town offices.