Despite voter approval, controversy still swirls around a new city tax aimed at creating a dedicated revenue stream for Salida’s recreation and cultural resources.
City representatives will meet again with the lodging community on Tuesday, Nov. 25, in an effort to heal what many describe as a “rift” between the city and lodgers created by the city proposed and voter approved occupational lodging tax.
On Nov. 4, voters approved measure 2B, authorizing the city to collect an occupational lodging tax of $4.82 per night per occupied room to fund local pool, parks, trails, open space and the SteamPlant. After the election, city council approved enacting the tax at a rate ranging from $2.50 to $4.82, pending negotiations with the local lodging industry.
While some voters may be surprised to learn the tax may not be enacted at $4.82, the rate debate is no surprise to local lodgers, joined by the Salida Chamber of Commerce and Monarch Mountain who have been battling before, during and after the Nov. 4 election to eliminate or reduce the tax rate.
The objection to the occupational lodging tax centers around perceived adverse affects on tourism. Lodgers fear the $4.82 flat tax will put Salida at a competitive disadvantage at a time when a weak economy is making competition for tourism dollars even tougher. Perhaps more weighty are fears that the tax may negate collection of the county’s lodging tax from hotels within Salida city limits, a loss of revenue estimated at upwards of $175,000 of the county’s $300,000 lodging tax fund.
Lawyers for the city and county have examined the issue and determined there is no conflict, while the lawyer for the Colorado Hotel Lodging Association and a spokesperson for the State Department of Revenue have said there is a conflict. County attorney Jenny Davis has sent a letter to the state seeking a definitive answer to the question. As of press time, a response had not yet been received.
Recreation Advisory Commission Co-Chair Mike Harvey distilled his view of the situation. “City Council saw a problem and offered a solution now they have an obligation to follow through on it. Putting aside the possible legal conflict, you need money to build things and you need money to market things.”
Hugh Young, whose revenue enhancement plan led council to propose 2B, said the voters were clear and want to see the benefits of passage of 2B. Young suggests starting at $2.50 and annually adjusting the rate upward to keep pace with inflation, up to a cap of $4.82.
The city is scheduled to finalize the tax rate and authorize its collection at the next regular council meeting Dec. 1. The tax would take effect Jan. 1.
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Chronology of a Controversy
Key Stakeholders’ Views
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