Colorado communities use their tax revenues in various ways to support their economies. In some communities, for example, local governments use tax revenues to support workers in need of child care, by subsidizing child care centers and home child care providers.
The Town of Pagosa Springs and Archuleta County are two such governments.
Our local governments here also tend to support workforce housing, in various ways.
Earlier this month, a friend sent me a link to an online article in the Durango Herald, that bore this headline:
La Plata County may propose slashing Visit Durango’s tax revenue
Speaking as a news editor, I find the art of writing news headlines to be mildly fascinating. Ideally, the headline will cause a reader — even a reader who might not have a strong personal interest in the subject — to click the headline and read at least the first couple of paragraphs. In this way, the editor can help inform the public of important issues to which said public might have limited exposure…
…while also potentially generating ‘clicks’ for advertisers?
You don’t want your headline to be misleading, but you do want to catch the reader’s attention. In this case, for instance, the DH headline includes the idea of something being “slashed” and also the ever-interesting topic “tax revenue”.
Slashing tax revenue… that’s something many Coloradans ought to find interesting.
When I wrote the first draft of this editorial, I had composed this headline:
La Plata County Considers Reallocation of Lodger’s Tax
But the DH editor had done a more sophisticated job with the headline. “Slashing” is much more enticing than “Reallocating”. Thus, my decision to include the word “Slashing” in today’s Daily Post headline.
In reality, the idea the La Plata County commissioners are considering — a potential ballot measure in November — involves “reallocating tax revenue”. Taxes, per se, are not being slashed. Rather, taxes might be used in a different fashion.
Many Colorado communities, over the past couple of years, have been taking advantage of House Bill 22-1117, a bipartisan bill passed on 2022 and subsequently signed by Governor Jared Polis.
Prior to 2022, county lodging tax — a percentage tacked on to the price paid by customers of hotels, motels, guesthouses and short-term rentals (STRs) — could be used only for “tourism marketing and advertising”. House Bill 22-1117 allows county voters to reallocate up to 90% of the revenue for other (more important?) community needs.
From the bill summary:
The act expands the allowable uses of the revenue from a local marketing district’s marketing and promotion tax and a county’s lodging tax to include:
- Housing and childcare for the tourism-related workforce, including seasonal workers, and for other workers in the community;
- Facilitating and enhancing visitor experiences; and
- Capital expenditures related to these new purposes.
A local marketing district or county must obtain voter approval to use the tax revenue for the new allowable uses. The state law is based upon the understanding that a tourism industry depends as much on a vibrant local workforce as it does on incoming visitors. And without housing and child care, the workforce will not be vibrant.
Here in Archuleta County, most of the hotels and motels are located within the Town of Pagosa Springs, and those customers pay a 4.5% lodging tax. But the Town government operates under a Home Rule Charter, and the Town Council is legally able to reallocate those revenues to different purposes — such as housing and child care — without needing voter approval.
The Town Council has discussed this idea, but never taken the steps to actually do it.
The flow of county lodging tax expanded exponentially over the past several years, with the growth of the vacation rental (STR) industry here. Most of our STRs are located outside the Town boundaries, in the unincorporated county, and thus pay into the County lodging tax. But the Archuleta Board of County Commissioners have never, to my knowledge, had a serious conversation about allowing the voters a chance to reallocate County lodging tax revenues towards housing and childcare.
Over in Durango, all of the county lodging tax revenues — close to $1 million annually — had been allocated to ‘Visit Durango’, the local tourism marketing organization.
Citing results from an annual survey, La Plata County is considering a ballot measure that would ask voters to redirect somewhere between 30% and 50% — $300,000 to $500,000 — to other “tourism-related” uses. For two years in a row, the survey found that around 85% of voters would support shifting the money away from Visit Durango.
In a written statement, Ted Holteen, the La Plata County representative on the Visit Durango board of directors, explained:
“This would allow for investing in the workforce that supports the robust tourism our community enjoys as a vibrant mountain destination.”
There’s that word “vibrant” again.
The City of Durango also has its own lodging tax, and has been contributing about $2.2 million annually to Visit Durango.
According to the article by Herald staff writer Reuben M. Schafir, the proposal to shift money away from Visit Durango does not sit well with the organization’s Executive Director, Rachel Brown.
The survey question informed respondents that the lodgers tax revenues are used “for advertising and marketing for tourism,” and asked whether they would support “shifting more funds … to other purposes related to the impacts of tourism, such as housing and childcare for the tourism-related workforce, including seasonal workers, and for other workers in the community, with less funding for tourism marketing.”
“They described our services as strictly advertising and marketing for tourism, which does not even crack the surface of the breadth of what we do for the community,” Brown said. “We’re a destination management marketing organization, we practice sustainable tourism marketing, and we do feel that if that had been accurately described in the question, the results would have come out differently.”
It’s my understanding that, under current state law, Visit Durango is not allowed to use its County revenues for anything except “advertising and marketing for tourism”… until the voters decide to give the County permission to spend the revenues otherwise.
Which is exactly what the La Plata commissioners seem to be considering for the November 2024 ballot.