Supporters of high culture were told Tuesday there was no room for an increase in the lodgers tax from 2 to 4 percent.
After executives of the two largest hotels in Durango, the DoubleTree and Strater, called the increase unfair for their businesses and their out-of-town guests, the City Council dropped a staff proposal to put the room-tax proposal before the voters in April as part of the regular municipal election.
The plan was to collect an additional $760,000 in room-tax revenue beginning next summer to provide additional funding for tourism marketing, the trolley and public art, as well as provide a stable source of support for local arts, science and cultural organizations, such as the Discovery Museum, the Center for Southwest Studies, the Community Concert Hall at Fort Lewis College, the Animas Museum and the Durango Arts Center.
Many of these places have hit hard times, struggling without support from the city since Durango stopped making direct contributions to cultural institutions during the recession in 2009.
Many are in dire need of capital improvements, said cultural supporters at the councils study session. The Discovery Museum is prone to flooding because it so close to the Animas River. The Arts Center anticipates needing a new roof in a few years.
Lack of adequate funding has contributed to a high turnover in executive staffing for local cultural institutions.
Many organizations are ineligible to apply for grants because they lack local matching funds, said Bill Carver, a supporter of the Discovery Museum and the room-tax proposal.
A survey on behalf of local cultural institutions found they and their patrons support 309 local jobs and contribute $9 million to the local economy.
While raising the room tax would have raised the overall sales-tax rate on hotel rooms to 11.9 percent, supporters argued that regional cities such as Breckenridge, Moab and Gunnison already charge similar or higher overall sales-tax rates on their hotel rooms.
A year ago, city staff members had proposed raising the lodging or room tax by an additional 3 percent, but this proposal was shelved once the city realized it would not be able to put the issue before the voters last spring because of a state law limiting votes to tax increases to municipal elections or general elections in November.
As a compromise to the lodging industry, the city scaled back the proposal from a 3 to 2 percent increase for 2013.
But lodging officials still argued that the cumulative rate put them at a competitive disadvantage with hotels just outside city limits that do not pay city sales taxes.
Peter Marshall, general manager of the DoubleTree, and Rod Barker, president of the Strater, questioned the fairness of making out-of-towners pay for local arts, science and culture.
Marshall said most visitors come here for the railroad, Mesa Verde National Park and outdoor recreation.
The art study is a seismic shift in how we perceive people coming to Durango, Marshall said.