Referendum 2A will determine future of Steamboat air program
October 17, 2018
STEAMBOAT SPRINGS — The reserves will run out at the end of 2019, and supporters of Referendum 2A say it is again time to increase the Steamboat Springs sales tax in order to support the airline program that incentivizes air carriers to bring direct flights filled with tourists to Yampa Valley Regional Airport in Hayden.
The tax dollars are used to pay airlines if their flights do not get agreed-upon revenue.
The referendum calls for increasing the sales tax rate in the city of Steamboat by 0.20 percent for the next 10 years. The tax would generate an estimated $1.3 million annually.
Voters last approved the airline program tax at a rate of 0.25 percent in 2011. The tax expired in 2016, and supporters did not push to renew it immediately because there were adequate reserves to fund the air program for the next few years.
With the sales tax, there would be three funding sources to support the air program.
If 2A passes, Steamboat Ski and Resort Corp. will increase its contribution by 45 percent from $1.1 million to $1.6 million.
Visitors who stay at lodging properties currently pay a 2 percent tax, which goes to the air program as well.
The sales tax would be the third revenue source.
The tax was debated during a recent election forum. Steamboat Springs City Council member Scott Ford spoke against the tax, not as a council member but as a citizen and local economist.
He said Steamboat residents currently pay about 60 percent of all the sales tax collected in the city. Visitors contribute about 40 percent.
"Voting 'no' sends the supporters of 2A back to the drawing board," Ford said. "They do not need to come to the citizens of Steamboat for this money."
Some have said that the lodging companies should contribute directly to the fund because they benefit financially. Currently, the companies collect the 2 percent tax from customers and then pass that along to support the air program.
"As voters we must ask, 'Where is their fair share?'" Ford said.
Resort Group President Mark Walker countered by saying the lodging community is contributing because if there was not a 2 percent tax passed onto their customers, they could charge a higher rate for their rooms.
Since the airline program sales tax was approved in 2011, direct flights have increased from seven to 15.
"If this referendum does not pass, it has an impact — not only every business but every resident," Steamboat Ski and Resort Corp. President Rob Perlman said.
He said if airline seats decreased by 15 percent, that would mean up to 10,000 fewer people visiting Steamboat who would have spent a combined $13.4 million.
"Our portion as locals is 17 percent toward the local flight program," Walker said. "It's a small investment with a big return."