Our View: LMD best sent to voters
The Steamboat Springs City Council took the right step in allowing a local marketing district to come before voters in November.
As City Councilwoman Kathy Connell noted, the proposal is by no means perfect. But overall, the benefits of the proposal outweigh the drawbacks. Most importantly, the local marketing district provides a stable mechanism to fund airline flight guarantees critical to our resort economy.
If approved in November, the local marketing district would assess a 2-percent tax on lodging that would raise about $1.2 million per year for direct flights into Yampa Valley Regional Airport from major markets. The Steamboat Ski and Resort Corp. has agreed to match the marketing district dollar for dollar in airline flight funding or pay 60 percent of the cost of the winter air program, whichever is less.
Such an arrangement would be far better than the current set-up, in which businesses throughout the community are asked to fund the flights on a voluntary basis. Inevitably, this leads to unequal levels of contribution from similar businesses and pledges that are not fulfilled. If the tax fails, the business community surely will continue to fund the flights, but a lodging tax is a more sound approach.
There are parts of the proposal that are less than ideal. Foremost, the boundaries of the local marketing district are drawn in such a way that the district includes nearly all of the city’s nightly lodging properties but only an estimated 640 voters. Many feel the tax should be voted upon citywide.
We agree that a citywide vote would be preferable, but given the history of such votes, it is understandable why the lodging community has chosen this approach. The proposed local marketing district has a very narrow focus. The tax will not be paid by local residents and it will not affect whether the community continues to fund airline flights, only how they will be funded. Given those parameters, the fact that all of the city’s residents don’t have a say is less of an issue.
Others complain that the local marketing district could undermine the work of the Tax Policy Advisory Board, which is charged with developing overall tax policy recommendations for the city. We don’t buy it.
As we have said before, we believe the formation of the tax board was a catalyst for the lodging community to develop this proposal. However, as Council President Paul Strong noted, there is no reason the board can’t continue to study lodging as a potential source of tax revenue for the city. If the board thinks that additional lodging tax is needed or that revenues from the lodging tax should be used in a different way, it should develop a proposal and make a recommendation to the city.
Though not all residents will vote on the local marketing district, all of the city’s residents will have a say, through the City Council, in the district’s operation. Under the proposal, the council approves the district’s taxing plan, appoints and removes members of the board and can dissolve the district at any time.
The local marketing district will provide a stable funding source for airline flight guarantees and is subject to oversight by the City Council. The advantages of the plan are clear, and council was right to put it on the November ballot.
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