Until this year, Colorado counties with voter-approved residency taxes could only use the proceeds for advertising and marketing local tourism.
But state lawmakers have approved a dual bill, House Bill 22-1117, which extends the permitted uses of provincial accommodation tax – paid as a percentage at the nightly rate at hotels, motels, guesthouses and short-term rentals. Governor Jared Polis, a Democrat, signed HB-1117 into law on March 31st. It will take effect on 10 August.
With voter approval, provinces and local marketing districts will soon be able to spend tax revenue on housing and childcare for the tourism workforce, or on “improving the visitor experience”, which could include the improvement of outdoor recreation facilities. Voter approval is required due to provisions in Colorado’s Taxpayer’s Bill of Rights. At least 10% of the tax revenue should be spent on advertising and marketing for the tourism industry.
“This is one of the most consequential pieces of legislation for affordable labor housing in the mountains in a very long time,” State Rep. Dylan Roberts, one of the sponsors of the bill, said in a written statement with the signing of the bill. “Mountain communities have long called for this tool – the ability to use the revenue generated by tourists to support the workers and communities that serve those tourists – but have been prevented by state laws from doing so.”
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Some elected officials in Colorado who are heavily dependent on tourism hope the new law will help them address the affordable housing crisis, labor shortages and an influx of new visitors to outdoor spaces. They plan to ask voters this fall to use income from existing property taxes in new ways, or to approve entirely new property taxes.
When the COVID-19 pandemic hit, rural and resort communities had a ‘tremendous attraction’ for urbanites who wanted to get away, said Gini Pingenot, director of external affairs for Colorado Counties Inc., which pursues provincial interests. “With that came pressure on services for which local communities were simply not equipped or ready. So that lived experience, I believe, really helped people realize that we need a mechanism to get visitors to contribute to the services they use. ”
On June 21, the Eagle County Board of County Commissioners became the first to approve a resolution that, if approved by voters in November, would increase taxes by 2% on short-term stays and 90% of the proceeds on affordable housing and children will use. take care of the local workforce. The remaining 10% will be used for marketing to attract tourists. The new tax will only apply to areas of the country that do not already have a residence tax – namely unincorporated Eagle County and the town of Gypsum – as Colorado laws prevent provincial and city residence taxes from being “layered” on top of each other. word.
If our parents cannot go to work because they do not have childcare, our businesses will suffer.
– Summit County Commissioner Elisabeth Lawrence
Commissioners from Summit and Clear Creek counties are among those who have also expressed interest in bringing their own residence tax measures to voters. Those provinces’ resolutions have not yet been finalized and voted on by land commissioners, which would have to happen before they get to the November vote.
Summit County Commissioner Elisabeth Lawrence would like to see a new provincial residence tax on the local ballot this fall. Such a tax would cover the unincorporated areas of the country, and exempt the towns of Silverthorne, Breckenridge, Dillon and Frisco, which already have their own residence tax.
The lack of affordable housing and child care in Summit County has exacerbated a labor shortage for one of the state’s hottest real estate markets, home to four ski resorts. A needs assessment for 2020 has identified a shortage of 730 for sale and rent units in Summit County that could grow to about 2,000 units by 2023.
For workers in the tourism industry who can manage to find a place to live, there is the challenge of finding someone to take care of their children during the working day. Nearly 700 children are on a waiting list for child care in Summit County, Lawrence said.
“At the end of the day, it really supports those working families in our community,” Lawrence said of a possible residence tax. “It is also an economic driver. If our parents cannot go to work because they do not have childcare, our businesses will suffer. We have a very low unemployment rate and a large, large number of openings here of available jobs (such as) that we really can not fully serve our tourism community. ”
A 2% property tax in Summit County will raise an estimated $ 2 million a year, Lawrence said, as the Keystone and Copper Mountain ski resorts, along with thousands of short-term vacation rentals, are located in the unincorporated areas of the country. be taxed. Along with housing and child care, Lawrence would like to see revenue help pay for public infrastructure needs that have grown since the COVID-19 pandemic began.
“In many areas of the unincorporated parts of the counties, we might not plow seven days a week because it was not really necessary,” Lawrence said. “Now we can have visitors in those areas seven days a week, so that definitely changes our daily operations.”
Clear Creek County leaders are considering their own ballot measure to help address high visitor traffic, Commissioner Randy Wheelock told Newsline. “(Tourism) has both positive and negative impacts on both our community and our environment, and therefore some of those impacts require management,” Wheelock said.
The district includes popular tourist attractions such as the Indian Hot Springs, white water rafting and zipline tours. Clear Creek is one of 29 Colorado counties that already has a 2% residence tax, so a ballot will simply ask voters to use the tax revenue for more than just marketing to tourists. Opportunities may include investing in housing or childcare, managing parks and trails, or educating tourists on how to be good stewards of the outdoors.
Before the text of the ballot was finalized, Wheelock said Clear Creek County plans to investigate voters how they want to spend the tax revenue.
“We want our decision to put something on the ballot to be at least partially informed by the answers we get from that survey,” he said.
HB-1117 – the law that makes these ballot measures possible – was sponsored by Roberts, an Avon Democrat, and Rep. Marc Catlin, a Montrose Republican, with Sens. Don Coram, another Montrose Republican, and Kerry Donovan, a Vail Democrat. . Colorado Coalition for the Homeless; Healthier Colorado, a public health and climate advocacy organization; and Counties and Commissioners Acting Together, a group of provincial governments and local elected officials, were among the bill’s supporters. The Tourism Industry Association of Colorado opposed the policy.
HB-1117 passed the Senate by a vote of 23-10, with two lawmakers, Coram and Democratic Sen. Brittany Pettersen of Lakewood, apologizing. In the House, the vote was 46-18, with Rep Mike Lynch, a Wellington Republican. All of the “no” votes on HB-1117 belonged to Republicans, although several GOP lawmakers voted in support.