Tax board debates lodging tax |

Tax board debates lodging tax

Members think tax could set an 'unfortunate precedent'

Christine Metz

The city of Steamboat Springs’ Tax Policy Advisory Board thinks the 2 percent tax on lodging to pay for airline flight guarantees could set an “unfortunate precedent.”

Much of Thursday’s Tax Policy Advisory Board meeting was spent discussing the proposed lodging tax.

The Lodging Committee of the Steamboat Springs Chamber Resort Association has proposed the creation of a local marketing district. The boundaries of the district include most of the city’s lodging properties, but few residents and thus few voters. If approved, all of the lodging properties in the district would assess a 2 percent tax that would raise an estimated $1.2 million to help fund direct jet flights to and from Yampa Valley Regional Airport.

Tax Policy Advisory Board members plan to send a letter to the Steamboat Springs City Council explaining the board’s position on the proposed tax, a revenue analysis and policy suggestions.

“We choose to address the implications of this procedure on future city revenue needs and requests from other organizations and entities for special tax districts and taxes,” the letter reads.

At an Aug. 17 meeting, a majority of City Council members were supportive of the Local Marketing District plan.

If the council approves the tax at its Sept. 7 meeting, the proposal will go to voters in November. But because of the district’s boundaries, only an estimated 200 to 300 registered voters will be eligible to vote.

Members of the Tax Policy Advisory Board have said a tax on lodging is one of the most feasible sources of new city revenue.

“When we look at Steamboat Springs’ voter history, if (visitors) are going to pay, it is OK,” board chairman Ken Solomon said. “If we are going to pay, it is not.”

After the defeat of its fire tax last November, the City Council appointed the tax policy group to review the city’s revenue and expenditures and make a recommendation on a taxing structure. The board has made no recommendations.

Tax board members say the City Council could set a bad precedent by approving the lodging tax without considering the full picture of the city’s finances.

“Because the (lodging tax) is being considered outside of a broader consideration of city revenue needs and potential sources to meet those needs, it leaves open the possibility of other entities/organizations seeking taxing ability in the same ad hoc manner,” the letter reads.

During its review of the city’s finances, the group said it has become aware of other potential proposed special taxes or tax districts — the base area revitalization plan, a proposed tax for the Main Street program, the intent of the Multi-Jurisdictional Housing Authority to seek a limited property tax and the possibility of a tax to fund the Steamboat Springs Parks and Recreation Department.

“The city has no policy and procedure in place to consider these different taxing authorities and tax needs and the proposed (Limited Marketing District)/ Accommodation tax sets an unfortunate precedent,” the letter reads.

The board also reviewed policy suggestions, written by board member Rich Tremaine. The policies — many are in draft form and need approval by the board — ask that the council establish criteria for creating new authorities and districts.

The policies suggested any major new community funding needs be identified no later than May 1 of each year and that consideration for proposals of community capital needs and funding needs be done only at the annual or mid-year budget review.

The policies also suggest that any ballot issue with significant tax and financial implications be presented to the council for first read at least 180 days, or six months, before the election. Another policy suggestion was for the entire city to vote on taxing issues that could affect the entire city, even if the tax would not cover the entire city.

Support Local Journalism

Support Local Journalism

Readers around Steamboat and Routt County make the Steamboat Pilot & Today’s work possible. Your financial contribution supports our efforts to deliver quality, locally relevant journalism.

Now more than ever, your support is critical to help us keep our community informed about the evolving coronavirus pandemic and the impact it is having locally. Every contribution, however large or small, will make a difference.

Each donation will be used exclusively for the development and creation of increased news coverage.

For tax deductible donations, click here.

Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.

User Legend: iconModerator iconTrusted User