For the first time in decades, Durango groups have come together to put a lodgers tax increase on the ballot.
The tax is not paid by Durango residents, but by people staying at hotels, motels and temporary vacation rentals. Durango City Council, with support from local stakeholders groups, voted Tuesday to raise the tax to 5.25% from its current rate of 2%, in perpetuity.
“Council has rallied behind this cause, the stakeholders are in support and the residents get it. Now let’s get it done,” said Rachel Brown, executive director of Visit Durango, during Tuesday’s City Council meeting.
In April, Durango voters will see a ballot measure describing the proposed lodgers tax increase and how the money would be allocated.
Each year, 55% of the revenue generated by the increase would go to sustainable tourism marketing; 20% to transportation and transit services; 14% to arts and culture programs; and 11% to any of the previous uses or other tourism impacts.
With the additional revenue, Durango organizations such as Visit Durango would promote tourism during slow shoulder seasons while avoiding the impacts of overtourism.
Creative groups, such as the Durango Creative District, would be able to strengthen the local creative economy through events and programs. The transit funding would support many, but not all, Durango Transit routes.
“These creative districts can become hubs of economic activity,” said City Councilor Melissa Youssef, using Ridgway’s creative district as an example. “They bring vitality, uniqueness and identity to a community.”
If approved, the tax is estimated to collect about $900,000 from June to December 2021.
City Council members have been debating exactly how the revenue would be used for weeks. On Tuesday, they voted 4-1 in favor of the resolution. Councilor Barbara Noseworthy was the sole “no” vote.
During a public hearing, representatives of groups, such as Purgatory Resort, Durango Business Improvement District, the local chapter of the Colorado Restaurant Association and the city’s Chamber of Commerce, spoke in support of the proposed increase.
During the City Council meeting, Noseworthy proposed an alternative plan that would allocate 45% of the overall lodgers tax revenue to transit and workforce housing. The rest could be used for marketing and the arts, she said.
Other councilors have agreed that transportation and housing need to be addressed, but disagreed that the lodgers tax was the appropriate tool. Some called it an “11th hour change” that would be a mistake. Her alternative was defeated 4-1.