The city of Durango expects to spend $55,000 to $58,000 on a ballot question this November asking voters for permission to retain about $1.1 million in excess lodgers tax revenue collected in 2021 and 2022.
The city also announced this week it has finalized language for the November ballot question. Based on the ballot question, the city will split the excess lodgers tax revenue in three ways:
- 66% for affordable and workforce housing programs.
- 20% for transportation, parking and transit services, as well as equipment and facilities.
- 14% for arts and cultural events, programs and facilities.
If voters reject the ballot measure, the city will refund the money to residents through a credit to each residential utility account. The refunds are expected to total about $218 per account, said Tom Sluis, spokesman for the city of Durango.
Lodgers tax ballot language
QUESTION 2-A: AUTHORIZATION FOR THE CITY TO RETAIN CERTAIN REVENUES FROM THE CITY LODGERS' TAX INCREASE.
MAY THE CITY KEEP ALL REVENUES COLLECTED IN 2021 IN EXCESS OF $900,000 FROM THE 2021 VOTER-APPROVED INCREASED LODGERS' TAX RATE OF 3.25% AND ALL REVENUES COLLECTED IN 2022 THAT OTHERWISE WOULD BE REFUNDED FOR EXCEEDING ESTIMATES IN THE NOTICE MAILED TO VOTERS IN CONNECTION WITH THE 2021 INCREASED LODGERS' TAX RATE OF 3.25% AND MAY THE CITY SPEND SUCH EXCESS REVENUES COLLECTED FROM THE LODGERS' TAX FOR THE FOLLOWING PURPOSES:
66% FOR AFFORDABLE AND WORKFORCE HOUSING PROGRAMS; 20% FOR TRANSPORTATION, PARKING, AND TRANSIT SERVICES, EQUIPMENT, AND FACILITIES; AND 14% FOR ARTS AND CULTURAL EVENTS, PROGRAMS AND FACILITIES, AND MAY THE CITY CONTINUE TO COLLECT THE TAX AT THE 3.25% RATE?
Jarrod Biggs, assistant finance director for the city, said the refunds would likely occur in two installments: The first would occur before the end of December in the amount of $135, which would cover the excess lodgers tax collected in 2021. The second would occur sometime next year, which would cover the excess lodgers tax collected in 2022. It is too soon to know how much excess lodgers tax the city will collect this year, but based on current projections, the city anticipates issuing credits worth $85 in 2023 should voters reject November’s ballot measure.
By comparison, the average monthly utility bill is $105, Biggs said. He noted bills can vary quite a bit based on a number of factors, including how much water is used by individual households.
The city expects to spend up to $58,000 putting the ballot question before voters, Sluis said. Expenses include costs for paper, staff time, counting city ballots separately and printing blue books, he said.
City Clerk Faye Harmer said the largest anticipated cost is for printing blue books, which ran about $3.20 per voter during the 2020 election. Blue books are delivered to individual voters and provide information about the ballot items, including pro and con statements. With about 13,100 voters in the city, the cost for blue books alone is expected to run about $41,920, Harmer said.
“The printing cost for that booklet has gone through the roof over the last four or five years, which has increased the cost of elections overall,” she said.
Other costs include hiring an outside bond counsel that assists with compiling legal language around the Taxpayer’s Bill of Rights Amendment, she said.
Harmer said she hopes to keep ballot expenses at no more than $45,000, but a conservative estimate is $55,000.
Some residents have criticized the city for trying to keep excess lodgers tax revenue rather than giving it to residents in the form of utility bill credits.
Durango resident John Simpson, a frequent watchdog of city finances, predicted the city’s ballot measure will fail by 20 percentage points, 40-60.
He noted residents narrowly approved the lodgers tax increase in 2021, even though it is largely paid by out-of-town visitors. Now city residents have a chance to keep some of that revenue, and he doubts they are going to part with it easily.
Simpson said the city has good fund balances and can use its own money for affordable housing, parking, transportation, and arts and culture without asking voters to keep the $1.1 million.
“It’s not like they need this money to go out and do those projects,” he said.
Durango resident Dave Peters also said the odds of voters allowing the city to keep the excess lodgers tax are “extremely low.”
“Why would you spend a significant amount of taxpayer money on a ballot measure that probably has very little chance of passing?” he said during a City Council meeting last week.
But Jasper Welch, a Durango businessman who advocated for passage of the lodgers tax increase in 2021, said he thinks Ballot Question 2-A has a chance of passing, and the decision to spend about $55,000 to let voters decide how more than $1 million should be spent is a good use of taxpayer money.
“What’s wrong with spending money to let the voters decide?” he said. “That seems like a pretty noble cause to me.”
The city’s breakdown for how it wants to spend the overages is largely in line with the original intent of the lodgers tax, he said.
The vote could be close, Welch said, but the fact that it is for multiple purposes – including workforce housing, transportation, and arts and culture – it has a chance of passing.
“Whether a majority supports it, we’ll see what happens in November,” he said. “But I think generally there will be support, particularity since it’s a multipurpose funding arrangement.”
Some residents have questioned why the city conducted a second survey about how the excess lodgers tax should be spent without asking residents whether they favored utility bill refunds.
Sluis said the city had already made it clear that if the ballot measure fails in November, the city will issue utility bill rebates. Councilors wanted to know if they moved forward with a ballot measure, how should the money be spent.
“Their question and their quest really was if this ballot measure moves forward, what is the sense of the community in terms of these priorities that they were trying to identify – in terms of housing, versus parking versus arts and culture,” Sluis said. “And so their focus was on those areas.”
Simpson seemed to agree, saying councilors had already made up their minds about asking voters to keep the money, but they wanted to take the pulse of voters and their priorities to have the best shot at retaining the funds.
“It was water under the bridge at that point: ‘We’re going forward (with the ballot initiative), and so let’s see what we can do to garner the most support for this,’” he said.
shane@durangoherald.com
