As a home rule municipality, the Town also has the option of imposing an excise tax on specific goods or services as it sees fit. Excise tax revenues could be dedicated to fund affordable housing; however, this requires voter approval first. This option could be viable and create a steady revenue stream for affordable housing if the voters can be persuaded…
— from a December 2019 memo by the Town of Pagosa Springs’ former legal counsel, Collins Cockrel & Cole.
One of my dad’s favorite expressions was, “Put your money where your mouth is.” He didn’t necessarily mean “cash money”… the expression also implied the need to put an honest effort toward supporting your values and beliefs. And your agenda.
Our local governments are currently considering their budgets for 2024. In a very real sense, a government defines its values and beliefs by where it proposes to use our tax revenues. I assume the elected Pagosa Springs Town Council and Archuleta Board of County Commissioners will basically preserve the status quo, in terms of addressing the overall needs of the community.
Part of the status quo is promoting tourism.
The status quo has been very good for the tourism industry. Here’s a graph showing the quarterly amounts of Lodging Tax revenues collected from motels, vacation rentals and B&Bs located within the unincorporated county. (Not within the town limits.) The County collects a 2% Lodging Tax.
(The 2023 numbers are shown only through June 30, the end of the second quarter.)
As we can see, the lodging industry collected and submitted about $528,000 in Lodgers Tax in 2022. The tax is actually paid by our visitors.
That implies a total income (for those lodgers who honestly reported their taxes) of about $26 million dollars in room and vacation home rentals, outside the town limits.
We might notice that the taxes submitted in 2022 were more than three times the total submitted in 2017. We might also notice that the taxes submitted in 2023, for half the year, exceeded the total for the entire year for any year prior to 2019.
Also during 2022, the Town received about $937,000 from its own separate 4.9% Lodging Tax, submitted by the lodgers located within the town limits.
Pretty close to $1 million.
We might also recall that the Pagosa Springs Area Tourism Board voted unanimously to allocate not one single penny to the community’s housing crisis in 2023. $150,000 for pickleball courts? No problem. $25,000 for a 15-minute fireworks show? Sure, why not?
Address the housing problem for the workers who serve the industry? Not a chance.
The Tourism Board seems to be adopting a similar stance, again, with their 2024 budget.
The Town Council and BOCC appear willing to endorse the position taken by the Tourism Board.
Did I mention one of my day’s favorite expressions? “Put your money where your mouth is”?
I think I also mentioned the tendency to preserve the status quo, even in the face of an obvious crisis. People don’t like change. If you simply keep doing what you’ve always done, you don’t have to think very hard. Our community leaders — elected, appointed, and business leaders — have spent the past 20 years subsidizing one particular industry with millions of dollars in public funding. Motel owners. Vacation rental owners. Rafting companies. Tour guides. Gift shop owners. Restaurant owners. Realtors. That’s the status quo.
But the world around us is not stuck in the ‘status quo’. It’s changing with each passing day.
Here are a couple of graphs I’ve shared before in the Daily Post.
I would be off base, to claim that the frightening increase in the cost of a modest Pagosa Lakes home is directly related to a similar increase in the amount of tax money used to subsidize Pagosa’s tourism industry. The correlation is obvious, but correlation doesn’t necessarily imply ‘causation’. Housing prices are skyrocketing all across the country, even in places with no discernible tourist industry.
But here are a couple of other charts. In the summer of 2018, the non-profit organization called Pagosa Housing Partners surveyed employees to put some data to the housing crisis. In the first chart, households paying more for their housing than the 30% recommended by the Colorado Housing and Finance Authority are shown in blue, pink, green, lavender and orange.
The people struggling the most with living expenses are indicated by the ‘orange’ boxes. These folks were paying in excess of 50% of their income for housing costs. All of those “severely cost burdened” households were earning an annual income of less than $38,000 a year. Which is to say, they were probably employed in the Lodging and Hospitality sector.
Pagosa Housing Partners did a follow-up survey in the summer of 2021, again surveying working families.
Note the increase in “cost burdened” households. We now see that even nearly all the families earning up to $60,000 a year are “cost burdened”. The share of “severely cost burdened” — paying more than 50% — has increased significantly. Or maybe the right word is, “frighteningly”.
This increase in struggling working households has been caused by our Pagosa housing crisis, which was caused by a number of factors, including, perhaps, the conversion of 1,000 single-family homes and condos into vacation rentals. But we cannot blame the problem entirely on vacation rentals. Many factors have played into the crisis.
We can note, however, that the massive investment in subsidies for the tourism industry has not made things ‘better’. Things have become ‘worse’ while we were dumping millions of dollars into promoting the tourist industry.
At any rate, this is the current ‘status quo.’
A few years ago, the Town Council seemed to be seriously considering the idea of allocating a portion of its massive Lodging Tax revenues towards workforce housing. We also saw a majority of Town voters approve a ‘Workforce Housing Fee’ on vacation rentals, to be used exclusively for increasing the amount of workforce housing in the community… but the then-Town-attorney, Clay Buchner, was unable (or unwilling?) to defend the voters when a group of STR owners challenged the fee in court.
The Town Council was similarly unwilling to impose a fee similar to what the voters had approved, using their legislative powers.
So much for the status quo.
Anyone ready for a change?