Commissioners grappling with LMD spending

Funding visitor’s centers, STOR, childcare, housing?

By Katherine Nettles

Lodging tax funds are getting spread thin across Gunnison County, and while commissioners have indicated they are willing to dip into reserves for 2025 due to some timely opportunities, they are not comfortable depleting reserves into the future. Commissioners held a work session this week to discuss their budget from the Local Marketing District (LMD) that collects lodging taxes to fund marketing, tourism and more recently, up to 40% of the funds on affordable housing and early childhood resources within the county. As the number of uses for the LMD funds has expanded, commissioners decided they are not ready to grant funding increases to some other tourism entities like the local chambers of commerce across the county despite some promising innovations among them. 

The county’s Tourism and Prosperity Partnership (TAPP) budget comes directly from the LMD, and TAPP presented its budget proposal for 2025 earlier this fall. TAPP leaders sat in on the work session on Tuesday, November 12 to discuss the various allocations of LMD funds.

Commissioners reviewed TAPP’s $3.3 million budget request, which was unchanged from a work session in September. TAPP’s budget includes marketing, economic development (primarily through TAPP’s ICELab and Western Colorado University collaborations) and $75,000 for environmental stewardship (primarily through the county’s Sustainable Tourism and Outdoor Recreation [STOR] committee).

They also reviewed several asks from four different visitor’s centers across the county.

The Gunnison Country Chamber of Commerce has requested that commissioners repeat their 2024 contribution of $25,000 to the organization in 2025, while the Crested Butte/Mt. Crested Butte Chamber of Commerce has asked for double the annual LMD contributions of $25,000 plus adding a two-year grant of $35,000 annually to expand a student internship program. The Marble Crystal River Chamber of Commerce has also asked for $30,000 in 2025 and anticipates that the Marble area will generate that lodging revenue itself. The county has historically awarded LMD funds back to Marble in that manner and in 2024 started issuing payments quarterly as revenue comes in rather than a lump sum at the end of the year.

The county-wide LMD funds are expected to total $3.5 million in 2024, and county manager Matthew Birnie projected that 2025 LMD funds might take a slight dip to $3.4 million since other resort areas have reported slight downturns and Vail Resorts recently reported their skier numbers had been down in 2024. TAPP has indicated that Gunnison County didn’t lose revenue in 2024 because lodging rate increases compensated for fewer visitors. But that is not a sustainable trend, as Birnie and TAPP executive director John Norton have both acknowledged. 

The county has pledged $500,000 of its LMD revenue in 2025 toward the Whetstone Community Housing project it is building in the North Valley. It may do so again in 2026, which will further squeeze the LMD budget, but it is not expected to be a recurring expense beyond Whetstone’s construction. Therefore, commissioners discussed a plan of dipping into reserves for the shortfall of $300,000 but not going further.

“There’s a timing issue in this,” commented commissioner chair Jonathan Houck about spending money as it comes in. “We’ve been able to do this with good leverage over the years and been able to build good programs without dipping too much into the reserve. Now we’re dipping into the reserve.”

 Birnie concurred. “I’m comfortable with what we’re doing, I just want to be very upfront that that is not sustainable over the long term. We can’t take a half million for housing and $3.3 million for other activities year after year.”

Commissioner Laura Puckett Daniels noted that if the STOR and Whetstone funds were lumped together as “other uses” beyond the original LMD statute for marketing and tourism, she said, this represented 16% of the revenue. 

“We’re talking about going into reserves already to fund some of these things. I think the question for this board is partly about are the percentages allocated in alignment with our community’s priorities,” she stated. She suggested that since voters in 2022 approved using up to 40% of the LMD revenue for affordable housing and childcare, those should be a larger factor. 

“I would encourage you not to look at percentages,” countered Birnie, describing that it can be more about what results the funds bring to each effort.

“What I want us to do is utilize LMD monies toward supporting the workforce and also toward recreation infrastructure when we have leverage opportunities,” said Houck. He argued for maintaining chambers of commerce funds at 2024 amounts to “leave some powder dry” for other things, and noted that the visitor’s center model still needed to modernize to stay relevant in a digital era.

“I don’t want to be dismissive about seeing creativity and change coming to the visitor’s centers and I’m willing to look at the opportunity to put more money there for transformative change,” he said. He suggested that a valley-wide chamber be a conversation, as should incorporating Western and Crested Butte Mountain Resort as key players.

Puckett Daniels asked if the Crested Butte/Mt. Crested Butte Chamber, which staffs two locations and receives the majority of visitors, warranted an increase. She said she didn’t want to “gut marketing,” but would be comfortable putting more money into the other things that support the community and its tourism.

Commissioner Liz Smith recommended they get more clarity on the various desired outcomes of programs that can be funded by the LMD before awarding more money. She said she would like to see more invested in early childhood care as well down the road. “What are the outcomes we are looking for?” she asked.  “I just want to be thoughtful about how we end up changing those dynamics.”

Houck said they are continually reducing marketing money, while still getting better performance than comparable resort towns, and that might reach a tipping point. 

“I’m worried that we are down to just under half of what is spent is spent on marketing…I want to make sure that we can continue to put money toward housing, early childhood, sustainable tourism, all those things. And that mechanism at the end of the day is the marketing piece.”

Commissioners agreed to stick to their current $25,000 per visitor’s center in 2025 while looking into more “transformative change” funding for them in the future.