At a sparsely attended work session this week, La Plata County commissioners took the first step onto a lengthy path that could result in a reallocation of the lodgers tax.
County officials may choose to ask the question, but it is voters who will decide whether to redirect some of the revenue from the 2% tax, which is tacked onto the price of short-term lodging and paid primarily by out-of-area visitors.
All of the revenue generated by the tax is currently passed through to Visit Durango, the region’s destination management and marketing organization, but voters could dictate that some revenue instead be used to address the impacts of tourism.
All three members of the Board of County Commissioners indicated a desire Tuesday to vote at the board’s July 9 business meeting on a formal message to County Clerk and Recorder Tiffany Lee informing her of their intent to put a question on the November ballot.
The notification would be nonbinding, but is a necessary step if the board decides to proceed.
The language of a hypothetical ballot question has not yet been drafted, as conversations with stakeholders are just beginning. The county could legally ask voters to reallocate up to 90% of the lodgers tax revenue, which generated about $1 million last year.
In late April, then-Executive Director of Visit Durango Rachel Brown informed the organization’s board of directors that the county was considering asking voters to redirect between 30% and 50% of the lodgers tax revenue. County officials say they have never landed on a number and do not know where Brown came up with that range.
About 90% of Visit Durango’s $3.2 million budget comes from lodgers tax revenue collected in either the county or the city.
Thanks to a 2022 Colorado law that recognized a growing need to “address the social, cultural, and environmental issues related to tourism,” counties may ask voters to reallocate lodgers tax revenue away from its traditional marketing uses.
Instead, counties could redirect the money toward funding for housing and child care for the tourism-related workforce (including seasonal or other workers in the community), to facilitate and enhance the visitor experiences or on capital expenditures that relate to those two purposes.
“The genesis behind this is, and I think its important to say, is not to gut tourism marketing – that’s not the genesis of it,” Commissioner Marsha Porter-Norton said. “The genesis of it is to recognize and understand that tourism doesn't happen in a community without workers in the workforce.”
Since the law passed, nine Colorado counties have asked voters to reallocate an existing lodgers tax or reallocate an existing one, according to La Plata County staff. Of the nine ballot questions, eight passed.
Commissioners indicated a level of uncertainty around how a reallocation might impact the key players and how to best leverage a relatively small amount of money.
Based on revenue, even the maximum allowed 90% reallocation would generate only $900,000 annually – a small sum in the context of something like the need for affordable housing.
The Regional Housing Alliance of La Plata County, which focuses on the development and maintenance of attainable housing, has already drafted a letter in support of the ballot question. Deputy County Manager Kevin Hall and Porter-Norton both serve on the RHA Board and have recused themselves from the matter.
In a draft of the letter obtained through a Colorado Open Records Act request, the RHA board said a ballot question could present “a significant opportunity to secure a short-term, sustainable funding source for RHA operations.”
“Our organization is uniquely positioned to leverage these funds effectively, ensuring that they are directed toward initiatives that will have a tangible and lasting impact on our community,” the letter read.
Although the commissioners say the intention behind any potential ballot question is not to gut tourism marketing, a decision to do so would nonetheless be a blow to the embattled organization.
Visit Durango is under scrutinous eye of city officials, who have long begged for more clarity with respect to how the organization is spending taxpayer money. Brown, the former executive director who resigned June 3, had struggled to meet the city’s transparency demands.
The organization is now undergoing a forensic audit. City officials requested the examination of Visit Durango’s finances the week they discovered that the former board chair had a criminal history which included illegal use of a credit card.
As a part of the restructuring conversations prompted by the shake-up, the city of Durango has indicated it may bring tourism marketing in-house. This could force the county to either contract its tourism marketing services out to the city, or direct that money to another partner.
Once the BOCC has notified the clerk of its intention to put a question on the ballot, it has until Aug. 27 to sign an agreement with the clerk for election services. The final ballot question must be certified and delivered no later than Sept. 6.
Commissioners are likely to vote on the first step of the process and hear public comment on the matter at the July 9 business meeting at 10 a.m. in the County Administration Building.
rschafir@durangoherald.com
