New tax district proposed
Steamboat Springs — The resort lodging community will go to the Steamboat Springs City Council on Aug. 17 and ask to go to the voters for a 2-percent lodging tax.
If approved, the measure would establish a Local Marketing District that would raise about $1.2 million annually to help underwrite year-round airline revenue guarantees. Before the measure would be added to the November ballot, it would have to clear a second public hearing Sept. 7.
“People have been telling us we should go solve our own problem,” said Chuck Porter, general manager of the Sheraton Steamboat. “I’ve been a proponent of a broader-based solution, but I’ve come to accept that it’s probably going to have to be an accommodation tax.”
The plan assures that for at least the next five years, the Steamboat Ski and Resort Corp. will continue its annual support of airline guarantees at levels comparable to what it has contributed the past five years.
More specifically, Chamber Executive Vice President Sandy Evans Hall said, Ski Corp. will match funds generated by the LMD dollar for dollar up to a cap of $1.25 million, or 60 percent of the cost of the airline program, whichever is less.
With the addition of daily jet flights from Houston this summer, the total bill for year-round air service here is approaching $2 million.
Resort leaders have been looking for a taxing plan that would meet their goals of solidifying a funding source for direct jet flights and, at the same time, defuse resistance from local taxpayers. A lodging tax, they reason, is virtually neutral for Steamboat residents.
The last time resort leaders asked voters for a tax measure to support air service was in November 2001. That proposal included sales-tax increases for lodging, ski lift tickets and restaurant meals. Voters defeated the “3-2-1 tax” by a wide margin.
State law allows the establishment of LMDs for business recruitment and development. The resort community is ready to try again with a plan that, they say, will not affect local taxpayers.
The proposed boundaries of the new tax district snake through the mountain and downtown areas to include most of the nightly lodging properties in the city, and at the same time, limit the number of votes needed for success. Proponents estimate as few as 200 to 300 registered voters live within the boundaries of the LMD. Only those people would be allowed to vote on the LMD.
The possibility of increasing the city’s lodging tax to help fund the airline program surfaced in May, but it has taken the summer for the members of the Chamber’s Lodging Committee to work out the details of how the LMD would work with the Ski Corp.
A letter of understanding between the two entities leaves management and airline contract negotiating responsibilities to Ski Corp. However, it opens the program to government oversight in that the City Council would appoint a five-member board to manage the LMD. The council would have the option of limiting the board’s powers and would approve the plan for expenditure of LMD funds each year. The City Council president would lead the LMD board.
Ski Corp. marketing executive Andy Wirth said he applauds the “leadership” shown by the Lodging Committee in coming up with the tax proposal. He thinks it is perfectly acceptable that the Lodging Committee sought binding assurances that the ski area would continue to participate in funding the airline program. However, he said the ski area is not ready to turn over responsibility for airline relations to a third party.
The chamber “does not have an entity that has the ability to manage a program that is very central to our company’s success,” Wirth said.
Last winter’s contracts with the various airlines that flew vacationers into Yampa Valley Regional Airport near Hayden demanded $1.8 million in revenue guarantees. When the final tallies were in, the number was slightly less than $1.7 million. Wirth said Ski Corp. footed about 60 percent of the bill with the lodging community contributing 25 percent and the rest of the business community making up the balance. The ski area’s 60 percent share was the lowest ever, Wirth added.
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