Residents in Ketchum and Hailey have decided to raise city taxes to subsidize commercial airline service.
The decision green lights a 1 percent sales tax on lodging and rental cars. Ketchum's vote also adds a 1 percent retail sales tax. Groceries and gas, however, won't be included in this.
As Northwest News Network's Tom Banse reported Monday, the money from the tax increase will go to entice airlines to serve the Wood River Valley’s airport either through subsidies or advertising support.
Eric Seder chairs the board of the marketing non-profit Fly Sun Valley Alliance. He says every airline he's approached lately wants a contract guaranteeing the profitability of the route.
"It's so difficult for them to make money," explains Seder. "They just can't serve a market like this without some assurance that they're going to make a certain amount of money."
Seattle-based Alaska and Horizon Airlines received revenue guarantees from three ski destinations it serves: Sun Valley, Mammoth Lakes, California and Steamboat Springs, Colo. ~ Northwest News Network
An airline spokeswoman explained in an email that such guarantees have "introduced air service to communities that would not have gotten service otherwise."
Idaho requires 60 percent majority approval to levy a local option tax. It's estimated the tax will bring in about $2 million every year.
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