City committee discusses possible uses for PRAT revenue
Noticeable short-term street repairs favored
BY KEVIN BONESKE
After receiving more than $83,000 in first-quarter revenue from the half-percent “Premier Resort Area Tax” that took effect Jan. 1 in Rhinelander, the city’s Public Works Committee has begun discussing some possible uses for the money, which would be available to fund road repair projects.
The tax, which received overwhelming support by Rhinelander voters in an April 2016 referendum and subsequently was enacted by the City Council, was set up in the city to help pay for infrastructure expenses such as fixing roads. The additional half-percent tax commonly known as “PRAT,” which is charged in the city by “tourism-related retailers,” brings the total sales tax in Rhinelander to 6 percent.
In the city’s 2017 budget, an estimated $400,000 has been projected in annual PRAT revenue, which previously wasn’t available to spend on road work before the tax took effect.
“Of all the PRAT issues we’ve talked about in the past – if, if, if – well, here’s the money,” Mayor Dick Johns said at Monday’s committee meeting.
For the purpose of budgeting, city public works director Tim Kingman said “conservatively” the city could expect $360,000 in PRAT revenue for 2017, based on the first quarter.
“What would be realized is likely $400,000,” Kingman said. “However, we don’t have any means to understand if this is an average quarter, or a quarter that would be unrepresentative.
“If this was just an average quarter, we’d be looking at $320,000. But what I would anticipate happening would be that there would be about 1.5-2 times (more revenue) in the third quarter and perhaps a little less in the fourth quarter.”
Though the city couldn’t be assured of the PRAT revenue, Kingman said “one would anticipate there would be additional commerce that would generate additional tax funds.”
Alderman Mark Pelletier said he would expect the trend in the amount of PRAT revenue generated to be similar to Rhinelander’s room tax.
“The first quarter is usually pretty low, because Jan. 1-March 31 is the slowest (quarter) for sales around here,” Pelletier said.
Johns said he would expect around $160,000 in second-quarter PRAT revenue.
Though Kingman noted there could be $360,000-$400,000 available annually in PRAT money, he said that amount could be used to finance a larger project.
Alderman Steve Sauer cautioned against using PRAT money for long-term borrowing.
“If we start borrowing out 30, 40, 50 years – on major projects, based on the fact that we’re 100 percent sure we’re going to have this (revenue) – the law may change,” Sauer said.
Sauer said he favored using the PRAT money with “some sort of immediate effect.”
“There are some people out there that still aren’t too happy about this (added half-percent sales tax),” he said.
Council member Sherrie Belliveau agreed with Sauer.
“There are a lot of people out there that don’t understand that this money is only to be used for infrastructure repairs…,” Belliveau said. “If we start not showing immediate effect, they’re going to say, ‘See, told you we were right, the money’s going somewhere else.’”
Johns said he favored using the PRAT revenue to do repair work in the city this summer.
“These people have waited long enough,” he said.
Council president George Kirby said “the taxpayers deserve something they can see.”
“It doesn’t have to be large,” Kirby said. “It just has to be some improvement where they say, ‘Now look at (that), we are getting something for this money,’” he said.
Given the $80,000 already budgeted in 2017 street repairs, Kingman said a total of $440,000 would be available if adding a “conservative” estimate of $360,000 in annual PRAT revenue.