Mammoth’s BID not without critics

Greg Simas questioned another tax.

Greg Simas questioned another tax.

Ballots were expected to go out to Mammoth Lakes businesses to vote on whether they support a new Business Improvement District with a new assessment on their revenue. The BID, as it’s called, would raise some $5 million for various kinds of marketing.

An open house on this issue was scheduled for Thursday, May 9th from 5 to 7pm at Rafter’s Restaurant. Mammoth Lakes Tourism Director John Urdi told the Town Council last week that the BID Steering Committee members will be there to answer questions. Urdi said ballots would go out to businesses. He said the proposal requires a 51% plus vote to move forward.

If the vote does come in that high, a Resolution of Intent will go to the Town Council. Urdi said he expects that to happen May 15th. If there is approval, Urdi said a mailing with an explanation will go out to businesses.

A 45 day comment period would follow. He said there would be an opportunity to comment at the June 5th Town Council meeting with his hopes of approval at the first Council meeting in July. If there is approval, collection of the BID assessment would start in August.

At last report, the assessment amounts to 1% on lodging, 1.5% on retail and restaurants and 2% on lift tickets. One long-time restaurant owner, Greg Simas of Grumpy’s, stood up to question whether this is the right time for more taxes. He said, “If it is, the whole community should vote in a sales tax increase.”

Simas said many business owners “have no idea what this is about.” He also said, “How many times can we go to the well?” Simas said customers are a precious commodity, and Mammoth keeps passing things on to them. Simas questioned, “How much can they absorb?” He also pointed out that there are over 70 cities with a Business Improvement District and none assess restaurants and retail.


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28 Responses to Mammoth’s BID not without critics

  1. No more Taxes! May 5, 2013 at 8:21 pm #

    Taxation without representation!

    Vote with your dollars by boycotting local business. This is a scam on the taxpayers and our visitors, hold these culprits accountable by voting these stooges out of office.

    • Desert Tortoise May 6, 2013 at 2:51 pm #

      Where is the “without representation” part? The BID tax has to go up for public hearings and a vote of the City Council, and only then if a majority of businesses vote to go forward with the idea. By definition that is representation. At least put forth a logical counter argument.

      • No more Taxes! May 6, 2013 at 7:23 pm #

        All other measures required a 2/3 vote of the public to increase lodging TOT. This tax is being passed on to the consumer in the form of a tax, not being funded by business operating capital.

        Transient Occupancy Tax

        (Revenue and Taxation Code section 7280)

        The transient occupancy tax (TOT) is a popular type of excise tax available to both cities and counties. A TOT may be levied on the occupation of rooms in a hotel, inn, tourist home or house, motel, or other lodging where occupancy is to be 30 days or less. A TOT may also be levied on spaces in an RV park or campground (Chapter 1186, Stats. 1992). In concept, the revenues from a TOT can help offset general fund costs, such as police protection, street cleaning, and museums, that are engendered by the traveling public.

        At this writing, over 340 cities and several counties levy transient occupancy taxes. Proposition 218 requires some existing TOTs (i.e., those enacted in 1995-96 without popular vote) to stand for a vote of ratification.”Any new TOTs or increases must likewise be approved by voters.”

        I concur with Mr. Greg Simas, this should be subject to a public vote. This is increasing TOT by 1%.

  2. MJA May 6, 2013 at 8:18 am #

    More taxes, how much money do they need? =

    • Desert Tortoise May 6, 2013 at 2:54 pm #

      This is businesses deciding to tax themselves out of their revenues in order to pay for improvements to the business district as a whole, for things individual businesses would not pay for on their own. Why do you have such a problem with that?

      • h May 6, 2013 at 6:57 pm #

        Uh, customers will pay the increased tax on their bills – businesses are just passing through the increased tax amount. The issue is will the increased tax cause visitors and locals to continue spending their $$$. In the end, the answer is yes because there are few alternatives.

      • No more Taxes! May 6, 2013 at 7:27 pm #

        This is costing businesses zero dollars!

        Why don’t they tell us the truth if this is on the up and up?

        • Desert Tortoise May 7, 2013 at 4:27 pm #

          No. No tax is paid for purely by the purchaser of a product. The cost of the tax is born by both the buyer and the seller. This is about the simpest explanation of how any tax works.

          The proportions of the tax paid for by the buyer and the seller are determined by the slopes of the supply and demand curves, and these slopes reflect the elasticity of demand and supply, the measure of how much demand or supply changes with a change in price.

          Here is what you are missing. For locals, demand is highly elastic, meaning what you buy is very sensitive to price. But for tourists coming to Mammoth or anywhere else for a vacation, price elasticity is very low. You expect to pay high prices on vacation. You save for it and deal with it. Merchants and economists understand this. A BID will not fall on locals very much at all. It will be paid for in part by the merchants as explained in my link and by buyers who are mostly tourists and thus not as concerned about fine price differences. Locals won’t spend a dime on the local motels and hotels and most do not eat out much, with or without the BID. It will mostly be tourists picking up the part of the cost of the BID that buyers pay for.

          • All you need to know May 7, 2013 at 11:39 pm #

            Proposition 218 requires some existing TOTs (i.e., those enacted in 1995-96 without popular vote) to stand for a vote of ratification.”Any new TOTs or increases must likewise be approved by voters.”

            A little slow even for a turtle!

          • Desert Tortoise May 8, 2013 at 1:15 pm #

            Did All You Need to Know even read what I wrote? A business cannot pass the full cost of a tax on to the customer. Some of the tax is paid for by the seller and some by the buyer. That was the gist of the post, and the link provided details the economics that support that statement. Did you read the material in that link? I guess not.

            Calling a Business Improvement District a Transient Occupancy Tax is uninformed. Read California Streets and Highways Code Section 36600-36604. 36601 (d) is particularly important to understand.

            (d) Assessments levied for the purpose of providing improvements
            and promoting activities that benefit real property or businesses are
            not taxes for the general benefit of a city, but are assessments for
            the improvements and activities which confer special benefits upon
            the real property or businesses for which the improvements and
            activities are provided.

            Since the BID tax can only be used to improve properties within the Business Improvement District and not the whole city, and the way the State Legislature deliberately worded this law, one cannot call these sales taxes or a transient occupancy tax.

  3. I'll be skiing in Tahoe May 6, 2013 at 8:25 am #

    I’m boyotting TOML and MMSA. Neither are getting one more cent from me.

    • SierraFan May 6, 2013 at 4:10 pm #

      I’m not a fan of over taxation either but if you want a sustainable ski town then this needs to be done. Do the math, if you spend $3000 a year @ 1% it’s an additional $30 dollars or $60 at the 2%.
      It would probably cost you way more than that to go to Tahoe in gas alone. They have a slightly lower bed tax but still isn’t worth it considering Mammoth has the best ski area in the state and is in close proximity to town.
      Support those that have risked their savings and business mind for our great place here in Mammoth!

      • Desert Tortoise May 6, 2013 at 6:07 pm #

        The entire cost of the tax cannot be transferred to the buyer. The cost will be split between buyer and seller in proportions that depend on the elasticity of demand and of supply. This is bedrock microeconomics. Read.

      • No more Taxes! May 6, 2013 at 7:29 pm #

        Because I’m tired of paying taxes that businesses pocket!

        • Blood from a turnip? May 7, 2013 at 10:19 am #

          If you have not noticed by now, the middle class in America is rapidly disappearing. Almost everywhere you go you are finding the mega-rich in the same community as the dirt poor living high on the hot. And, as the law of economics goes, it is only the rich that can afford … anything. This is the very same scenario as during the Great Depression where millionaires were made by the sackful while half of America was starving.

          This is why I am amazed at anybody in America today who would buy into the political war-cry: “Never tax the rich!” How stupid can some people be?

  4. Johnny Burg May 6, 2013 at 11:49 am #

    You clows that post here tirelessly negative are way too much! I read the TBID is 1-2% added to your bill and you are crying to not support the local economy, the town as a whole needs MORE CUSTOMERS like me that come to Mammoth and spend my hard earned money. There needs to be a sustainable local economy for business to survive and prosper, I will have no problem paying a few extra cents on my bills. I think it is a great idea that I am sure will be very successful for the community and all this nonsense will go away.

    I think its time some of you complainers move to June, ask all the locals how there economy is doing!

    • Clows May 6, 2013 at 3:47 pm #

      Number of visitors were up, TOT was up, but sales tax are down for the year to date Johnny, after the “best summer ever.”

      What could possibly be wrong with this equation?

      We’re about to be suckered to the likes of 3 times the MLLA settlement per year. Eight million a year with nothing to show for it but a white elephant of an airport that’s bleeding this town dry.

      What’s 9.5% of nothing? How much to you tip on zero?

      Keep your money in your wallets folks, spending local is a choice not a must. It’s time to drive that point home and let big bucks Johnny pick up the tab!

      • Desert Tortoise May 6, 2013 at 6:09 pm #

        So you will spend dollars on gas to drive somewhere else, and maybe even pay higher prices, to avoid a tax that will ultimately cost you pennies. Makes perfect sense to me, lol. We have some real intellects up here.

  5. business as usual May 7, 2013 at 6:12 am #

    “Business Improvement District”
    (aka develop, develop, develop …)

    And miracle of miracles!
    The acting mayor is … you guessed it … a developer.
    And look for “I recuse myself from …”
    (boisterous laughter)

    • Curious May 8, 2013 at 6:50 am #

      Time to vote them out! We need ethical and capable leaders and need to start recruiting their replacements now!

  6. Bemused May 7, 2013 at 5:21 pm #

    This is mostly a scheme by Rusty, et al. to shift MMSA’s airport subsidy obligation to the town/people. He himself said that there is a possibility that MMSA may drop out of the BID after their initial 2 year commitment (leaving everyone else holding the bag). The additional “sell,” is that the rest would be used for marketing.

    Many seem to buy into “more marketing” every time it’s floated, but we should be asking ourselves if we are truly under-marketed. The answer, is no. The internet (primarily) has drastically increased marketing dollar bang-for-buck over the past decade or so, and we’ve got a hefty presence there…as well as a very loyal guest base. Eventually, you do reach a point of diminishing returns when it comes to marketing expenditures, and I submit we’re at that point now.

    Perhaps we should concentrate on delivering more than (natural splendor aside) overpriced restaurants/drinks and a hodge-podge infrastructure to visitors once they arrive. Not that there hasn’t been some improvement on this front, but let’s keep it up.

    • johnny burg May 8, 2013 at 7:45 am #

      Bemused, once again another post with no basis or fact, Rusty can not drop out of anything “leaving the others holding the bag”, this is a 5 year TBID, all in or all out period. How is MMSA shifting air subsidy to the town/people, they are a private business and are taxing themselves via lift tickets, their hotels, their restaurants and their retail shops they own, I am sure the tax collected via the TBID will be passed on to the customer, as it should. What they elect to do with their money they collect is their business, again it is their business and they may do as they wish with their proceeds.

      You should go do some research online about TBIDS to learn the facts and how they work, not all that confusing as many make it out to be.

      • New Tahoe skier May 8, 2013 at 10:24 am #

        TBID will be passed on to the customer; that’s exactly why I’m boycotting everything Mammoth. The morons will have to figure away out of their mess without my help.

      • Bemused May 8, 2013 at 10:52 am #

        I don’t have time to go R & R. But if you search the archives of this very website (Benett?), you will find an article quoting Rusty saying EXACTLY what I have stated. I am also a long time insider, who’s very close to the principal players involved.

        I know of what I speak. There may have been some change in terms of the ski area’s commitment period, and/or of the scope of the stated purpose of the BID…but I can, again, assure you that the idea was hatched as I have outlined.

      • Bemused May 8, 2013 at 12:43 pm #

        I don’t have time to go R & R. But if you search the archives of this very website (or it might have been the Sheet…Benett?), you will find an article quoting Rusty saying EXACTLY what I have stated. I am also a long time local insider, who’s very close to the principal players involved.

        I always know of what I speak, or I don’t do so. So, I’m not sure what other posts you refer to…but feel free to rehash them any time, and prepare to get served.

        Back to the BID; there may have been some changes of which I’m unaware in terms of the ski area’s commitment period, and/or the scope of the stated purpose of the BID…but I can, again, assure you that the idea was hatched exactly as I have outlined, with air service funding as it’s primary purpose.

        • Bemused May 8, 2013 at 5:25 pm #

          Here’s an article quoting Rusty on the subject:

          Examine this statement:

          “The Sheet asked Gregory if the Mountain would continue to fund the winter air subsidy out of its own marketing dollars or would he expect the BID to take care of that responsibility.
          Gregory said it should be up to the group to decide whether it’s a group or Mountain responsibility, but that “this is not a scam for us to come up with money for air service.”
          The group should decide its commitments, said Gregory, whether it be to subsidize commercial air service or shelve it.”

          Note the typical RG double-speak there. Bottom line: Create a money-pool via the BID to fund Winter Air Service…and if the BID committee/MLT/Town Mgmt. decides they want to shelve it at some point, so be it. Meanwhile, Rusty knows full-well that this won’t happen once the funding pool exists. Net effect: The Mountain (significantly) reduces its individual liability for Winter air service subsidies.

          Again, I was personally privy to the initial conversations concerning the BID…and creating a pool to fund Winter air service was the goal. The reason this is being downplayed and whitewashed with the ever popular “more marketing” mantra, is little doubt because the prevailing sentiment (correct) of the public at large is that air service primarily benefits The Mountain, and that they should pay for it.


          • Curious May 9, 2013 at 7:02 am #

            Fool me once! September 8, 2012 at 4:41 pm #
            We all know the real deal, all settlement cost will be passed on to the taxpayer in the form of cuts to services and additional fees/taxes. Many will be forced to absorb a reduction in employment, pay, benefits, goods and services except the plutocrats and their cronies!

            This settlement statement is setting the stage for Assistant Town Manager Marianna Marysheva-Martinez to take the political fall out when the terms are announced after the fact, without any public knowledge about the settlement agreement. Obviously the town council think of us as an electorate mushrooms, best kept in the dark. The Assistant Town Manager will cut and run with her money, while we’re left with the debt and her empty apologies. ( O.k. I was wrong on who would be forced to cut and run.)

            I watched the town council presentation by the tourism director John Urdi last Wednesday evening too. It’s obvious the tourism director via the town council instructions are planning to force feed a business improvement district (BID) on the taxpayers and/or our visitors. This will result in a tax being called a user fee and implemented without a vote of the towns taxpayers. This airport will continue to bleed red ink with the taxpayers are forced pick up the tab for the “Air” subsidy boondoggle too.

          • Tax or not a tax May 13, 2013 at 6:46 pm #

            This whole TBID is a frikin scam on the people. It is not a sales tax so it is not applied after the marked price. Any sane business owner will pass the cost onto the purchaser. Prices will go up. The cost of lift tickets will go up. A TBID cost of 2 dollars per ticket will likely cost the customer more than 2 dollars.

            If the TBID tax is 2.00 per ticket and MMSA does not want revenue to go down per ticket then the cost of the ticket will go up by 2 bucks then there is sales tax on top of the sale.

            GOT it!!!!

            It may not be much but it is what it is.

            I agree with all those that think this TBID is wrong. I disagree with all those that say we need it. I say like a gun to my head.


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