Village of Ephraim Premier Resort Area Tax (PRAT) Proposal
The Village of Ephraim provides a variety of services and facilities for the public to enjoy. Other than the marina and wastewater utility, all other activities and services like parks, beaches, recreational areas, library, streets and sidewalks, public safety and fire protection are currently funded by the property tax levy. These services and facilities are sized for the peak tourist season, which add thousands of visitors to the Village on a daily or weekly basis but are paid for by Village residents and taxpayers.
What is the problem?
•Over many decades, the Village has built infrastructure including parks, beaches, roads, walkways, streetlighting, storm water systems, public buildings and emergency response equipment to serve its residents.
•Beyond the needs of its residents, the Village has added or improved these facilities to meet the additional demand created by tourists and to remain a premier tourist destination in Door County.
•These larger facilities and expenses were paid for by Village residents and property taxpayers, but not by the tremendous number of tourists.
•The only existing method to fund infrastructure maintenance and improvements is through higher property taxes.
•The Village has identified existing facilities that need to be upgraded to meet current needs and has established a 5-10 year capital improvement plan to quantify it.
•The Premier Resort Area Tax (PRAT) grants the Village the opportunity to share the cost of infrastructure with all the users, not just the property taxpayers.
Reasons to support tax
•The PRAT creates a mechanism to collect dollars from tourists and individuals who reside outside of the Village to fund many of the infrastructure needs, instead of it being funded entirely by Village taxpayers.
•This is the only option available to the Village to raise general funds other than from property taxes.
•The PRAT revenues will enable the Village to reduce borrowing, saving debt payments and burden on property taxes.
•The funds are restricted to infrastructure. “Infrastructure expenses" mean the costs of purchasing, constructing, or improving: parking lots; access ways; roads and bridges; sewer and water facilities; exposition center facilities used primarily for conventions; musical or dramatic events, or other events involving educational, cultural, recreational, sporting, or commercial activities; parks; boat ramps; beaches; other recreational facilities; and firefighting equipment.
•The impact of the 1/2₵ sales tax would cost you $50 if you spent $10,000 at tourism related stores and businesses in Ephraim. Most businesses in Ephraim would be defined as tourism related based on Publication 403 of the Standard Industrial Classification Manual. Online purchases sourced to Ephraim from an online vendor meeting this definition would also be subject to the tax.
•The imposition of a PRAT would mean that critical infrastructure would be paid for by visitors as well as property owners.