New city sales tax on ‘tourist-related’ items estimated to generate $400,000 in 2017

BY KEVIN BONESKE

REPORTER/PHOTOGRAPHER

As Rhinelander’s Finance, Wage and Salary Committee reviews next year’s budget, committee members are now considering what to do with one new source of revenue estimated to generate $400,000 for 2017.

The Premier Resort Area Tax (PRAT), which was overwhelming backed by city voters in a referendum April 5 as a means of raising additional money to pay for “transportation-related infrastructure” with a half-percent city sales tax on items deemed “tourist-related,” is set to take effect Jan. 1.

At Tuesday’s committee meeting, chairman Mark Pelletier suggested using the PRAT money in the future to reduce the amount of borrowing.

“On a $2 million borrow, instead of $1million for road projects, we’re letting this (PRAT revenue) take care of it, and we’re not having to borrow the full $2 million every other year,” Pelletier said. “That would help reduce our debt.”

City finance director Julie Ostrander said the PRAT money is placed in a separate fund and may only be used after the same amount of funds as the prior year would be spent on road work.

Committee member Tom Gleason, who also chairs the Public Works Committee, pointed out that the PRAT revenue would be distributed by the state to the city on a quarterly basis, so that the first quarterly payment wouldn’t be received until April of next year.

Given the road construction season, Gleason also noted the city could accumulate three quarters of PRAT revenue leading up to April 2018, with payments for the final two quarters of next year and the first quarter of 2018, to be used for road repair projects.