The Archuleta County Board of County Commissioners (BoCC) are considering putting forward a ballot question seeking to raise the county’s lodging tax for unincorporated areas.
On Wednesday, June 25, the BoCC held a special community listening session where the public was invited to share its feedback on the matter.
“Tonight’s meeting is all about having an open discussion about the possibility of the county putting a lodging tax question on the ballot,” Commissioner Veronica Medina said, explaining that state legislation was approved in May allowing counties to raise their lodging tax up to 6 percent with expanded uses those monies could be dedicated toward.
Medina explained the county currently has a lodging tax rate of 1.9 percent, and that a portion of those funds are legally required to be used on tourism advertising.
She noted that if the county wants to raise its lodging tax rate, the matter must be put on the ballot and that voters have to agree on what the funds will be used for.
Medina noted the expanded uses under the new bill include infrastructure needs, emergency service management, workforce housing and child care.
She also noted that the county usually brings in about $500,000 with its current lodging tax rate of 1.9 percent, indicating that if the rate was doubled, the county would receive approximately $1 million annually.
Commissioner Warren Brown indicated that it is important for him to know what the community’s appetite is on the matter, explaining that he does not want to waste time and resources putting this forward if the community is not on board.
“I do think this is an interesting proposition that may help us,” Brown said, specifically noting that funds could be used to improve the county’s roads.
Commissioner John Ranson also indicated his support for additional lodging tax funds to be used on road projects, but expressed concerns with the county attempting to put the issue on the November ballot.
“I really like this concept,” Ranson said, explaining that the community has multiple needs.
“We have a full plate,” he added, mentioning that other governmental entities may be turning to the community for more money this year and in the coming years.
“Just a tad late this year,” Ranson commented, noting that coming back at a later time may be a better option. “If we ask the people for too much too fast, it’s gonna hurt this community.”
Multiple public comments were heard, with the first commenter, Tucker Curtis, explaining he is a homeowner and short-term rental (STR ) owner, claiming that mountain towns across Colorado are seeing a decline in tourism.
He explained that he doesn’t want to see the community do anything to discourage tourists.
“We do rely heavily on our tourists to come,” Medina said, explaining she understood Curtis’ perspective.
She also noted the Town of Pagosa Springs has a 4.9 percent lodging tax rate.
Bob Milford also spoke, asking for recreation needs in the community to be kept in mind for a potential use of the possible additional lodging tax funds.
County Treasurer Elsa White asked what kind of timeline the county has for getting the issue on the November ballot and if the matter is a “onetime shot” or if the lodging tax rate can be raised incrementally.
Medina indicated that the county can go back to the voters any time it wants to make changes to the lodging tax rate.
Ranson went on to explain that he’s only “nervous” because of the short time frame the county has to try and get the matter on the ballot for this November’s election.
“I think it’s a good thing for us to look at,” he said, also noting concerns of the U.S. 160 construction project’s effect on downtown businesses.
He added, “The timing’s not good, but that’s just me.”
Bill Hudson spoke next, encouraging the BoCC that if it does put the matter on the ballot this year, the funds should be dedicated toward the county’s roads.
He explained that the consideration of using additional funds for housing projects may be a harder sell to the community.
“There’s a pushback on that,” he said. “You’d get a lot of support, even with a short time frame.”
One commenter encouraged the BoCC to be very clear about what the funds would be spent on.
Medina indicated she was thinking of proposing to have the lodging tax raised to 4 percent, not the fully allowable 6 percent.
“A little something to help,” she said, again noting a 4 percent rate could increase the county’s lodging tax revenues to $1 million annually.
Lauri Heraty also spoke, explaining she has had a business in Pagosa Springs since 1997.
“I understand the 1.9 percent is very low,” she said, adding that she served on the Pagosa Springs Area Tourism Board for seven years.
Heraty explained that her concern is if there has been any survey sent out to visitors and tourists about whether a lodging tax increase would deter them from visiting Pagosa Springs.
She explained that businesses downtown are missing out on certain tourist traffic that was common in the past but not as much now, specifically noting the reconstruction of U.S. 160 and its impact on business.
“You can just walk into any random business that’s downtown and they’re hurting,” she said. “I think right now you have to make Pagosa affordable.”
She went on to mention that the low lodging tax rate helps keep the community affordable, but noted that raising the rate at some point is inevitable.
“It’s inevitable and we should do it, but not to these businesses now,” she said.
Medina commented that the lodging tax is paid by visitors and tourists coming into the community.
She then provided an example of a room costing $225 per night, explaining that a lodging tax rate of 4 percent would equal $9.
“That’s $9,” she said.
Brad Hunt commented that county and town tax rates are not on his mind when traveling.
“The last thing on my mind is the town tax or city tax where I get a room,” he said.
Jesse Hensle commented that, from a lodging standpoint, “we can factually say” the community is seeing a decline in occupancy rates.
He also asked what the commissioners’ appetite is for spending more money on advertising that could have an impact on businesses that are currently hurting.
“That’s a tourism conversation, definitely,” Medina replied, explaining the evening’s meeting was to talk about the lodging tax rate and whether or not it should be included on the November ballot.
Brown explained that “however this turns out,” he would not be in support of taking any funds from the current 1.9 percent lodging tax rate away from current advertising measures, noting there is “great value” in that.
“The door is open,” Medina said, explaining that a future board of commissioners can also decide to go back to the voters for any changes.
She also explained that any additional allocation of revenue does not reduce or affect the baseline allocation.
Hudson commented that the town’s lodging tax rate of 4.9 percent is not affecting lodging within town limits, suggesting the county could match the town’s rate.
He also responded to Hensle’s comments, asking how much The Springs Resort has raised its nightly rates over the past few years, claiming it has been raised by hundreds of dollars.
“I don’t think that’s really an argument,” he said, adding that the tourism industry “has been jacking up their prices.”
Hensle commented that The Springs Resort’s guests pay both a town and county lodging tax, while Medina explained that it only pays a town lodging tax, but does pay both a town and county sales tax.
Ranson commented that he agreed with comments shared by Hudson, describing raising the lodging tax rate as a “low-lying fruit,” and reiterating that he is only concerned “just because of our time frame.”
Ranson explained that he was involved in a failed ballot issue during his first term as county commissioner.
“The truth is the people have not trusted the county, and we’ve got to earn that trust back,” Ranson added, noting the issue would not pass if the community does not know exactly what the additional funds will be used for.
He also explained that he believes the county has the ability to free up some more funds to be used on road projects during its next budget cycle.
“I truly believe that we can free some money up in our budget process to start increasing some money for the roads,” he said.
White inquired as to how a community survey on the matter would be distributed, noting concerns over the cost in postage alone to have a survey mailed out to every voter in the county.
Medina explained that the survey would likely be electronic or sent through email.
Public commenters also expressed desire for another community meeting to be held on the matter, suggesting that a Zoom link would allow for more people to attend.
In his final comments, Hudson explained that it is difficult for the community to be excited about something like this when the details are so vague, encouraging the county to be very specific about what is being done and what the funds will be used for.
“I don’t think the runway’s too short,” he added, noting that it is tourists who would be paying for it, describing the potential ballot measure as a “no-brainer.”
“We want the tourists to help us,” he said.
Hensle also agreed to offer space at The Springs Resort to be used for a future community meeting on the matter.
Medina commented that it is important to all of the commissioners “to build that trust with the community,” noting the BoCC has been meeting with multiple other community entities in regard to various community matters.
“Something I feel like … the three of us are really passionate about,” she said.
Butch Mackey was one of the last public audience members to comment, explaining that he’s spent thousands of nights in hotels, stating, “I’ve never once paid attention to the lodging tax.”
He added, “I don’t think that would be a big deterrent.”
clayton@pagosasun.com
