Lodging officials call foul over state plan for visitor fee

Hopeful state won’t act on concept

A potential visitor’s fee on lodging and car rentals has local officials up in arms over the effect it may have on attracting tourists.

Last April, Colorado governor Bill Ritter’s Blue Ribbon Panel on transportation began a study to determine ways to fund the yearly $1.5 billion needed to continue road maintenance and a lengthy repairs backlog. The study was completed in November 2007 and a final report was released in December.
The panel’s findings will ultimately come in the form of a package of policy and legislative recommendations to Governor Ritter. One of the suggestions is a $6 fee on daily lodging or car rentals; other suggestions included increasing vehicle registration fees by an average of $100, and raising the gas tax by 13 cents.
Mt. Crested Butte mayor Chris Morgan says some of the ideas presented by the panel are good ways to finance statewide road repairs, but burdening visitors with additional fees "is the wrong way to do it."
Morgan says adding new fees is the state’s way of getting around problems associated with the TABOR (Taxpayers Bill of Rights) amendment, which limits the amount of additional tax revenue the state can spend each year.
Mt. Crested Butte town manager Joe Fitzpatrick says the visitor’s fee could have a detrimental effect on state tourism by overly burdening out-of-state customers who rarely use the roadways. Fitzpatrick says Mt. Crested Butte would be just one of many resort communities that could be affected by the visitor’s fee. "It’s a level playing field," he says.
Gunnison-Crested Butte Tourism Association director Jane Chaney says, "If we tack this $6 a day onto rooms and car rentals, that in itself will be a great deterrent for visitors at the point of even choosing to come to Colorado."
Jim Valenzuela, owner of the Water Wheel Inn in Gunnison and member of the Gunnison Valley Lodging Committee, agrees. "You’re likely going to reach a breaking point where the cost associated with travel provides an opportunity for other tourist places to get that business… There are lots of places for people to go in adjacent states," Valenzuela says.
The Tourism Association recently sent a letter explaining why the visitor’s fee might be a bad idea to Governor Ritter, The Blue Ribbon Panel, Representative Kathleen Curry (D-Gunnison) and Senator Gail Schwartz (D-Snowmass).
In the letter, Tourism Association board president Joellen Fonken writes, "We could not imagine anything more devastating to our state’s $8 billion travel industry than adding these kinds of fees." The Tourism Association’s letter also cited several case studies. For example, the state of New York instituted a 5 percent tax increase on hotel rooms over $100. Conference planners boycotted the state’s hotels and the state had to rescind the tax three years later due to a loss of sales tax revenues.
Additionally, the Gunnison Valley Lodging Committee wrote a letter to local municipalities informing them of the tax. But Valenzuela says the letter is just meant to inform, not to spur the municipalities to write letters of their own.
Mt. Crested Butte Town Council member William Buck says the visitor’s tax and other potential funding sources were discussed during the February meeting of the Colorado Municipal League. Buck says the league, which represents cities and towns across the state, was generally in favor of the visitor’s fee as a way to finance road maintenance.
Chaney says, "We obviously need money to maintain our roads… but I don’t believe we should carry that on the back of visitors and put our lodging tax in Colorado at a level near the highest in the country."
Valenzuela agrees, saying, "For resort communities I’m wary of letting our visitors have an increased share of burden in our community other than just paying for room nights."
Chaney says the state already gets a portion of sales tax generated by visitors, and there is also a local lodging tax of 4 percent.
"The 4 percent lodging tax stays right here within Gunnison County to fund our tourism marketing… If we’re going to generate that tax revenue, isn’t it great those revenues can go right here in Gunnison County, and not in state coffers where there’s no guarantee we’ll benefit," Chaney says.
Valenzuela says the Tourism Association "makes a tremendous impact to our community."
In any case, Chaney doesn’t think a visitor’s fee will come to pass, noting, "I don’t think it’s going to go through. There has already been a great deal of input from destination marketing organizations, like our Tourism Association, and others all around the state who have rallied to make their voices heard."
As a specific industry-wide fee, the visitor’s fee would not require a vote of the public, according to the Blue Ribbon Panels summary.