Estes voters to mull lodging tax hike for workforce housing, child care

ESTES PARK – Estes Park voters will decide Nov. 8 whether to increase the lodging tax visitors pay at hotels and vacation-home rentals to help fund housing and child care for workers in the tourism-dependent town..

Approved Monday by the Visit Estes Park marketing district, the ballot issue would raise the  current lodging tax from 2% to 5.5%, allocating the additional 3.5% – revenue estimated to be around $5.25 million – to fund workforce housing and child-care initiatives, both identified as pressing needs for businesses in the mountain village at the gateway to Rocky Mountain National Park.

The extra percentage would be added to the nightly rate Estes Park visitors pay to stay at hotels, motels, guest houses and short-term rentals.

VEP will campaign for the increase, said Kara Franker, its executive director, by emphasizing to Estes Park voters that it’s “the tax you don’t pay. It doesn’t come out of the pockets of residents, but it benefits them directly.”

“We have all known for literally decades that both of these issues are crucial to solving if we all want to continue in business,” said Deborah Gibson, who chairs the VEP board of directors and who has co-owned Rams Horn Village Resort since 1989. “We’ve known it, we’ve had no way of addressing it,” she added, but “an incredible opportunity was dropped in our laps this spring.”

Passed by the Colorado Legislature and signed March 31 by Gov. Jared Polis, the bipartisan House Bill 1117 allows counties and local marketing districts that have levied voter-approved lodging taxes – previously allowed only to pay for advertising and marketing – to ask voters for extra money to spend on housing and child care for the tourism workforce or on “enhancing the visitor experience”  through items such as improving outdoor-recreation facilities. Voter approval is necessary under the Taxpayer’s Bill of Rights, and at least 10% of the generated revenue must be spent on marketing and advertising for the tourism industry.

The law will take effect Aug. 10, a week from Wednesday, prompting the VEP board to form the Lodging Tax Exploration Task Force. That group held regular monthly meetings to discuss whether or not to recommend to VEP, the town and Larimer County that Estes Park voters be asked to approve the increase, what it would be spent on and who would administer it.

The task force’s 14 voting members include two owners of large hotels or motels, two owners of small hotels or motels, two representatives of the vacation-home rental industry, one owner of a commercial campground, two advocates for workforce housing, two advocates for workforce child care, and three at-large members of the community.

Monday’s meeting cemented the task force’s decision to recommend that VEP hasten the issue onto the November ballot.

“Not only do we need to do it for logical business purposes, but as a community we are losing more and more of our workforce every day,” Gibson said. “Those who stay behind have a much tougher, more expensive life. I am concerned not only about the housing but about the child care,” she added, because of the number of “latchkey kids we have here.”

Franker said VEP would pass the revenue onto the Estes Park Town Board, which would have the authority to determine how it would be spent and the proportion that would be allocated to each of the two issues. That plan drew a letter of support from the Estes Park Economic Development Corp., but the lack of specificity in the ballot language troubled Larimer County Commissioner Kristin Stephens.

She asked task force members, “That won’t be something that’s included in the ballot language or the campaign for the initiative? Does anybody feel that would be problematic as far as passing the ballot measure if people don’t have a clear idea of how it’s going to be spent?

“I think the town can best decide how to spend it. I’m not questioning any of those kinds of things,” she said. “I’m just questioning whether if there’s not some definitive structure around how the dollars will be spent, do we feel like that deters taxpayers from voting for it – or because people in this area know the need is so great that you think it would pass?”

Franker defended the plan, noting that ‘part of what we discovered is that housing had been studied quite a bit more than the child-care piece. We don’t want to put too many strings attached onto the town, and they don’t want to throw money at things before you have the right procedures and plans in place.”

Town administrator Travis Machalek, interviewed after the meeting, depicted it as “a lot like a street-improvement tax — you’re voting on the tax, but not on the different mechanisms or specific projects. Those details don’t go on the ballot. It makes sense because needs evolve and change differently. You don’t want to lock yourself in at the start. The ability to have that money flex to where it’s most needed, I think, is a good idea.”

Machalek said he was excited that Colorado resort towns now have “new potential to address long-standing community needs, especially in statutory communities with limited funding streams.”

A needs assessment will be conducted to present more specific recommendations to the town, Frenker said, adding that “there’s still some work to figure out what the need is and how best to serve it.”

Both acknowledged that support for raising the tax rate isn’t unanimous in Estes Park. “There’s people who disagree with parts of it for various reasons,” he said.

At a May meeting of the task force, Franker said some stakeholders had suggested that VEP take the money out of its own budget instead of asking tourists to fork over more in a time of high gasoline prices and other inflationary pressures.

“I get heart palpitations when someone mentions touching our current budget,” she said then. “When you cut into marketing, there are some serious ramifications to that.”

She revived that concern at Monday’s meeting, reminding the task force that after Colorado in 1993 became the first ever state to eliminate its tourism-marketing  function, it didn’t regain its previous market share until 2015.

Several other Colorado counties and resort-town marketing districts also are considering putting similar measures on the November ballot, and Eagle County – home to Vail and Beaver Creek – already has done so. Eagle County commissioners on June 21 passed a resolution to ask voters to raise a 2% tax on short-term lodging and use 90% of the revenue it generated on affordable housing and child care for the tourism workforce. The rest would be designated for tourism marketing.

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