My friend Matt Roane sent me an email yesterday, offering a comment on the Pagosa Springs Area Tourism Board’s motto: “Refreshingly Authentic”
I am looking forward to the rest of your article on tourism. For my two-cents worth, we are way beyond comfortable capacity. No food at City Market. Routine U-turns on 160. Lines of traffic through town. Jacked-up garbage dumpsters. And people toting neon float tubes everywhere you turn. Right now, Pagosa Springs is about as ‘refreshingly authentic’ as Walt Disney World.
At what price do we bow to the almighty dollar? At the cost of our own peace and enjoyment? I hope we think more of ourselves and life than that.
This is not a new concern. The community has long been debating the wisdom of a tourism-based economy. Generally speaking, however, the “pro-tourism” sector has dominated local government discussions. Generally speaking, millions of tax dollars have been pumped into promoting tourism — and very little has been spent mitigating the negative effects.
Maybe that’s finally changing?
As we noted yesterday, then-Commissioner Michael Whiting made a comment at an April 2018 Board of County Commissioners work session, claiming that no one has attempted to answer the question:
“Who really pays for County government?”
In response, Pagosa Tourism Board Director Jennie Green seemed to come to the defense, momentarily, of the Daily Post — in the humorously sarcastic tone she occasionally adopts.
“I believe Mr. Hudson tried to come up with that formula, using April as the basis — because there are no visitors, apparently, in April. But we still generate over $30,000 in Lodging Tax in April. So unless there are a lot of unhappy marriages in April…”
Yes, in fact, back in 2017, the Daily Post did indeed do an analysis of the amount of sales tax generated by local residents as opposed to tourists, and we did, in fact, assume that Pagosa Springs had very little tourism in April. Ms. Green was dismissive of our analysis, citing a relatively modest Lodgers Tax collection during April. (Over the past six years, the average April collection had actually been closer to $20,000, and that included people who simply stayed in a hotel for one night, on their way somewhere else.)
But Lodgers Tax and sales tax are not the same thing. I was curious about sales tax. Who pays most of it?
As far as I know, the Tourism Board, with all its financial resources, has yet to present a credible analysis of how much tourism actually contributes to Pagosa’s financial well-being.
My analysis own of sales tax contributions was based upon a chart included in Archuleta County’s Fourth Quarter Financial Report for 2016. The Finance Department made it easy for us to view, in a graphic manner, the monthly sales tax collections over a three-year period. (The graph included 2016 as both the budgeted amounts and the actual amounts.)
The amount of sales tax collected each month produced a graph that looked somewhat like a mild-mannered roller coaster, climbing in March (when the Spring-Breakers show up for skiing at Wolf Creek) and then dipping to its low point in April (during mud season.) Our summer tourist season begins in June and rolls through September, and then we see another slight rise in December, when Christmas shopping takes off alongside the holiday ski season at Wolf Creek.
If Pagosa Springs had no tourism economy whatsoever, we could probably expect to see a fairly level line running straight across this chart, with a slight increase in December for the Christmas shopping season. So, obviously, we must have a ‘tourism economy’.
Or… maybe not?
If 90% of the April sales tax was paid by local residents, then local shoppers spent about $7 million on taxable purchases during April 2016, generating about $280,000 in sales tax. I assumed that spending by local residents increases during ski season, summer tourist season, and Christmas — when workers are earning more wages and tips — so let’s just say that, month after month, local residents contribute about $300,000 to County sales tax collections.
$300,000 x 12 months = $3.6 million in sales tax, contributed by local residents, in 2016. A reasonable estimate, in my humble opinion.
According to the graph shared by the County Finance department, the total 2016 sales tax revenues were about $4.6 million. If our analysis holds water, then Pagosa area visitors contribute about 20% of our annual sales tax revenues. And locals contribute four times as much: 80%.
Note that this calculation defines our numerous ‘summer season residents’ — the snowbirds — as “tourists.”
In my opinion, this estimate makes a certain kind of sense, considering that — according to Region 9 Economic Development District data — only 5% of Archuleta County employees work in the hospitality industry.
To answer Commissioner Whiting’s question, then…
“Who really pays for County government?”
… the answer is “not the tourists.”
Of course, these numbers will look dramatically different in 2021. Everything is different in 2021. The housing market. Rental rates. Summer traffic. Wait times at local restaurants. Empty grocery store shelves. Pages of ‘help wanted’ ads. People acting frustrated, and sad.
So let’s step back into the July 13, 2021 discussion at the Pagosa Springs Area Tourism Board meeting. We’ve just heard County Commissioner Ronnie Maez state that he prefers an increased sales tax, to help address the housing crisis.
“The tourists pay the biggest part of the sales tax, here,” Commissioner Maez stated, as if it were a well-known fact.
What does such a comment mean, even if it’s inaccurate? I have interpreted such statements, about tourism ‘paying most of the taxes’, as implying at least three things:
1) Tourism is good for the ongoing financial health of our local governments.
2) If tourists pay most of the sales tax, then our retail businesses — who collect the tax — are earning most of their money from tourists.
3) Full-time residents and businesses don’t need to pay as much for government services, because the tourists are paying for most of it.
Here’s former County Commissioner Michael Whiting, Tourism Board member, at the July 13 meeting:
But if, in fact, local residents are paying 80% of the County sales tax… then maybe an increased sales tax is not such a great idea?