To better clarify the discussion between two Pagosa Springs Area Tourism Board members — County Commissioner Ronnie Maez and former County Commissioner Michael Whiting — during the October 11 Tourism Board meeting (held via Zoom)…
Mr. Whiting had made a comment about conscientiously tracking the ups and downs of tourist traffic. “Especially when we’re going to be goofing around with our Lodgers Tax, over the next few years. So I want us to track, carefully, the results of goofing around with our Lodgers Tax…”
“Goofing around” was a curious way to describe the pending changes to which Mr. Whiting was referring. According to my own (admittedly limited) understanding of the idiom, “goofing around” typically refers to a situation where people are conducting themselves in a careless and carefree fashion, without showing too much concern about the outcome.
The term usually has a somewhat derogatory connotation. In my experience.
The first government body to begin seriously “goofing around” with the idea of reallocating the Town’s 4.9% Lodgers Tax was the Pagosa Springs Planning Commission, back in July of this year. Following a lively discussion about the best ways to minimize the negative impacts of STRs (Short-Term Rentals) in a small town already suffering from a lack of housing options, the Planning Commission had formally approved the following policy recommendations, and had forwarded them to the Town Council:
1. Require a 2-year ownership prior to applying for a short-term rental.
2. Increase the STR license fee by at least a factor of 12 for non-owner-occupied units, with the revenues 100% dedicated to workforce housing.
3. Allow only one STR license per property.
4. Reallocate the Town’s 4.9% Lodgers’ Tax “to the maximum extent possible” to workforce housing.
The Town Council subsequently adopted recommendations 1 and 3, as part of a comprehensive revision of the municipal STR regulations. But the Council has not yet adopted, or rejected, suggestions 2 and 4… except to give an indication that any reallocation of the 4.9% Lodgers Tax ought to be approved by the town voters — the same folks who created that particular tax in the first place, back in 2005 and 2006.
Item number 4 does not directly effect vacation rentals, although we can certainly assume that the vacation rental industry has benefited from the $9 million spent jointly by the Town and County governments, since 2007, on tourism promotion.
Item number 4 is directly related to Mr. Whiting’s comments to the Tourism Board, about “goofing around.”
Following the Planning Commissions policy recommendations, and subsequent Town Council discussions, a group of citizen activists developed a proposal for the Town Council — a way for the voters to weigh in on these tricky questions, by putting one or two tax measures on the ballot during the Town’s April 2022 municipal election.
While some people might think of political campaigns and ballot measures as “goofing around”, other folks consider these processes, in a more serious state of mind, and one particular group has presented a plan to the Town government.
Here’s one of the possible ballot measures that the Town Council could consider:
Reallocation of the existing Lodgers Tax
The Town Council and Town Planning Commission have both discussed this possible use of taxpayer revenues. But no final decision has been reached at the Council level.
The Pagosa Springs Area Tourism Board (formerly the Town Tourism Committee) makes recommendations about how to spend the combined revenue from the Town’s 4.9% Lodgers Tax and the County’s 1.9% Lodgers Tax. Those recommendations are then approved by the Town Council.
In 2015, the Town Tourism Committee spent $655,000 derived from Town and County Lodgers tax collections, to promote tourism. $537,000 of that funding came from lodging establishments located within the town boundaries, generated by a 4.9% Town Lodgers Tax. The remaining $118,000 was generated by the County’s 1.9% Lodgers Tax.
In 2020, the combined Lodgers Tax revenue was nearly twice the 2015 amount: $1.15 million. The Town’s 4.9% tax generated $796,000. The County tax generated $349,000. (We note here that the County’s portion of the total seems to be increasing at a much faster rate than the Town’s contribution.) These numbers are drawn from data published by the Pagosa Springs Area Tourism Board.
The Tourism Board is projecting, in their draft budget, similar collections for 2022. About $1.2 million.
Tourism promotion may be a crucial part of the Archuleta County economy. But a thriving tourism industry also has a pressing need for willing employees — a problem that the Tourism Board has yet to address in a meaningful way.
In line with recent recommendations coming from the Town Planning Commission, we believe that, given the (possibly negative) impacts of excessive tourism during the COVID pandemic — a pandemic which currently gives no indication of ending — 50% of the Town Lodgers Tax could be redirected towards a different method of serving the tourist industry: workforce housing for tourist industry employees, and employees and other industries that incidentally service visitors to our community.
If half the Town’s Lodgers Tax collection had been redirected to workforce housing last year, the total 2020 Tourism Board budget would have been $747,000 — which is still more than the very substantial $655,000 budget in 2015. And the community would have been able to spend $400,000 to support employee housing projects.
We recommend that 50% of the Town Lodgers Tax — the 4.9% controlled by the town voters — be reallocated to support housing options aimed especially at working families and individuals. The ballot measure might include a ‘sunset’ of, say, seven years, at which time the voters could decide whether to renew the allocation percentages.
Recent discussions by the Town Council suggest that the Council could support the redirection of a portion of Lodgers Tax funding towards workforce housing development, so long as the change is endorsed by town voters.
This measure, if placed on the April 2022 ballot, would be decided by the voters living within the town limits; county residents would not be able to vote on the measure. We note that this proposal does not create any new taxes; it merely reallocates existing revenues.
As we see in the above proposal, the money flowing into the Tourism Board’s bank account has increased tremendously over the past six years, and the increase is likely be attributable to one or two developments.
For one, the number of STRs within the community has increased dramatically over the past six years.
For another, the Tourism Board has seen their budget expanded just as dramatically, and has been using their expanded budget to encourage visitation. This is what is known, in some corners, as a “feed-back loop.” Money is spent to encourage tourism; the tourists come in greater numbers, and pay Lodgers Taxes when they stay; this causes the Tourism Board to collect more money to encourage tourism; and the cycle repeats.
And the housing, for local residents, becomes unaffordable, and impossible to find.
Bill Hudson began sharing his opinions in the Pagosa Daily Post in 2004 and can’t seem to break the habit. He claims that, in Pagosa Springs, opinions are like pickup trucks: everybody has one.