Voters typically don’t hesitate to tax “them.” It’s pretty common for Colorado voters to approve taxes on tourists, especially in mountain towns.
That was the case in Basalt, Mountain Village and Eagle, Gilpin, Ouray and Routt counties last week, where voters approved new taxes for skiers, hotels and short-term rentals.
But there were some surprising outliers of that traditional “tax them, not us” trend on Nov. 4.
Voters in Chaffee County rejected a plan to triple lodging taxes to pay for roads and public safety. Eagle County voters appeared to approve a double lodging taxes to pay for child care and public safety by only 82 votes. Voters in Vail appeared to narrowly defeat a plan for a 6% tax on short-term rentals by only 34 votes. Voters in Custer County rejected a lodging tax spike. Voters in Telluride rebuffed a plan to impose a 5% tax on skier lift tickets to fund the local gondola, while their neighbors up in Mountain Village approved that same lift tax.
In Manitou Springs, where the collapse of marijuana revenue has triggered a budget shortfall, voters killed a proposal for an amusement tax that would have nearly tripled a tax on tickets for the local Pikes Peak Cog Railway, zip lines, theaters and other tourism businesses. Cañon City voters rejected a plan for an 2.25% excise tax on rafters and train riders in an effort to scrape up $675,000 a year to operate a planned $25 million public swimming pool. The effort in Cañon City was vehemently opposed by rafting companies and the operator of the Royal Gorge Route Railroad.
That’s a lot of voters rejecting tourist taxes that promised local benefits. And it’s a sharp turn from the November 2022 election when voters in at least a dozen Western Slope communities decisively approved higher taxes on short-term rentals. (Three years ago voters in Aspen, Carbondale, Dillon, Durango, Glenwood Springs, Salida, Snowmass Village and Steamboat Springs joined voters in Chaffee, Eagle, Gunnison and Summit counties in raising taxes on short-term rentals to help pay for affordable housing.)
The successful opposition in Chaffee County and Cañon City urged residents to embrace tourism and support the businesses that host visitors. The campaigns aimed to balance a multiyear statewide effort to divert tourism taxes from tourism promotion toward housing, roads, child care and police.
Much of that diversion began in 2022 with legislation – House Bill 1117 – that allows communities to spend lodging taxes on housing and local amenities, not just marketing to lure more tourists. Legislation this spring – Senate Bill 1247 – took another step and allows counties to ask voters to triple lodging taxes to pay for roads and cops.
Andy Neinas has guided rafters on the Arkansas River for 40 years and owns Echo Canyon River Expeditions. He led the fight against Cañon City’s Ballot Question 2B, the pool tax.
He said Colorado ballots this year saw “too many questions that are hostile to the tourism industry.”
“These taxes will never have a positive impact, and they will always erode the foundation of our local economies and hurt small businesses,” said Neinas, who employs more than 80 people in the peak of summer and hosts as many as 20,000 rafters and overnight visitors a year.
Neinas said this election cycle’s work to oppose taxes on tourists was good, “but not great.”
“We need to do more to educate our communities about the value that we bring and the fact that our businesses are volatile in nature and we need support,” Neinas said. “The laziness and apathy of community members to not pay for their own things out of their own pockets is insulting and it’s just plain lazy. If you can’t find ways to pay for what you need in your community and your strategy is to ding people who are passing through, it’s time to look in the mirror and ask some hard questions about passing the buck to other people who are already delivering so much to your community.”
Tourism is ebbing in Colorado this year, on the heels of a slower 2024. The tsunami of visitors who flooded Colorado mountain towns after the pandemic has slowed to a trickle. That surge spurred all kinds of taxes, fees, caps and regulations on short-term rentals. It spurred tourism promoters to fully embrace visitor management over marketing. The effort to balance locals feeling overwhelmed with cars and traffic with the needs of a tourism-based economy has reduced the number of big-crowd events in high-country towns while overhauling marketing campaigns that traditionally cast wide nets for tourists.
“Could this election be a sign that people are wondering if pulling back from tourism was such a good idea?” asks Julia Koster, the executive director of the Colorado Short-Term Rental Association, which advocates for “fair and equitable” regulation of vacation rental properties.
Koster has led the growing chorus of tourism businesses and advocates in Colorado urging every resident to be wary of the unintended consequences of reduced tourism.
“We have said over and over that lodging taxes are not the answer to all our communities’ challenges. We cannot have one industry bearing the cost of every single community need, especially when that industry is the lifeblood of the community,” Koster said. “Maybe this election is a sign that we are all starting to recognize that if we continue to overburden this one section of the economy, that section will be in trouble and we all will feel the impact of that.”
