Could the city’s proposed occupational lodging tax to fund improvements for local recreation and cultural amenities end up slashing the county’s tourism marketing budget?
Lawyers for the City of Salida and Chaffee concur that collection of the county’s lodging tax would not be impacted by approval of the city’s occupational lodging tax ballot initiative 2B. However, a lawyer for the Colorado Hotel and Lodging Association disagrees. The murky question will be discussed Tuesday in a meeting between City Interim Administrator Mike Copp, Salida lodging industry spokesman Don Jackson, Salida Chamber of Commerce Executive Director John Englebrecht and Monarch Mountain Marketing Director Greg Ralph. It is unknown if any city council representatives will be on hand.
The question of possible unintended consequences by 2B first came to light a week ago when Jackson noticed the following line on the County Lodging Tax Return issued by the Colorado Department of Revenue: “NOTE: The county lodging tax cannot be charged in municipalities that levy their own lodging tax.”
The state administers collection and distribution of county lodging taxes. The local Chaffee County Visitor’s Bureau oversees the expenditure of those funds, though the board of County Commissioners has final say on all contracts and expenditures.
Jackson estimates Salida lodgers’ share of the countywide 1.9 percent lodging tax accounts for 65 percent of the county visitor’s bureau’s revenues. A 65 percent cut in the visitor’s bureau’s $300,000 budget would leave just $105,000 to market tourism.
Earlier this month, local lodgers packed a city council meeting to argue that the proposed $4.82 fee per room night occupancy tax would result in the highest room tax rate in the state and could be bad for business. In exchange for the lodgers’ agreement to support 2B, city council agreed that should voters approve the measure, the city would lower the room tax rate from $4.82 to $2.50 for at least the first year, before gradually ratcheting up the tax in subsequent years.
“I’m not trying to raise a ruckus, I’m just trying to get clarification,” Jackson said. “I would not want to trade the 65 percent the county gets from Salida to market tourism to pay instead for the city’s pool, recreation and cultural amenities.”