County moves forward with LMD redirection ballot issue

60/40 split in the works

[  By Katherine Nettles  ]

Gunnison County voters will have the opportunity this fall to choose whether a portion of Local Marketing District (LMD) funds can be redirected toward other community needs such as housing, childcare and recreational infrastructure in the general election. 

After years of advocating for the opportunity, Gunnison County commissioners seized the prospect for changing this allocation when it was provided by new state legislation that passed in the last session. House Bill 1117 expands what lodging taxes throughout the state of Colorado can be used for if passed by voters on a local ballot. Gunnison County commissioners unanimously approved a resolution on July 5 confirming ballot language for November that retains 60% of LMD funds for tourism marketing and promotion while up to 40% could be used for other tourism-supporting endeavors.

Last year, the county collected $3.49 million in LMD funds, which were primarily allocated to the Tourism and Prosperity Partnership (TAPP) to market the valley and promote business and Western Colorado University. According to TAPP director John Norton, LMD funds for 2022 from January through April have totaled $1.33 million.

“We’ve worked for years to really get some expanded language around LMD usage and lodging tax,” said county commissioner chairperson Jonathan Houck. “The passing of this bill has been really important and what we want to go to voters with this fall is the ability to not only continue to market and do economic development as we have under current LMD statute allowances, but to expand those uses to support our workforce.”

The Gunnison County attorney’s office drafted the document language, which county attorney Matthew Hoyt reviewed with commissioners in an executive session before the board convened as the LMD board and approved of it. 

The upcoming ballot issue reads, “Without raising taxes, shall the Gunnison River Valley Local Marketing District be authorized to use up to 40% of revenue from the marketing and promotion tax on the purchase price for rooms or accommodations to support housing or childcare for the tourism related workforce and other workers in the community, including seasonal workers, or to support recreation infrastructure in order to facilitate and enhance visitor experiences, and for all other purposes permitted by law, with at least 60% of marketing and promotion tax revenue to continue to be spent for organization, promotion,…

“…marketing and management of public events, activities in support of business recruitment, management and development, and coordinating tourism promotion activities?”

“HB1117 does allow up to 90% being spent on other work-related things like childcare, housing and things like that. We are contemplating 40%,” confirmed commissioner Roland Mason.

“I think that we’ve all seen the importance of tourism and marketing and I know that COVID brought in a lot more all at once,” said commissioner Liz Smith. “I think a lot of people do see and understand how lack of access to quality and affordable childcare, how lack of housing in the area does have significant repercussions on our workforce, our ability for our businesses to thrive even with more people coming in…I think this 60/40 split really retains the historic driving purpose behind erecting the LMD.”

She pointed to state funding that is coming in to further help with these issues. 

Houck cautioned that even if they asked voters to allow changing all of the LMD revenue it still would not be enough to “go build tons of housing or take care of all the issues around childcare. But we are going to ask the voters to allow us to utilize some of these funds to leverage other funds. Leverage is the key to the game and we’ve been doing that a lot,” he said. “We will leverage this money to the best of our ability if the voters approve, but this isn‘t enough for all of our needs in affordable housing, or tourism or marketing, or any of these things.” 

County attorney Matthew Hoyt said that although the ballot language would allow up to a 60/40 split, that would not have to be the exact portion used so much as it would provide a ceiling or maximum allowable use.

“This will not be a tax increase. This will not change the amounts that are collected under the current tax. It will not mean a change to the tax itself. It is merely a change in how a portion of those monies might be used at the discretion of the LMD board is approved by the voters,” said Hoyt.

The ballot issue will appear on the November 8 ballot.