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Lodgers Association questions tax increase

When Pagosa Springs Community Development Corporation board member Mark Weiler presented his proposal for raising lodgers tax two percent to members of the Lodgers Association, he said he knew his idea was not going to immediately embraced.

Weiler was correct.

After he presented the proposal (along with fellow PSCDC board member Morgan Murri), members of the Lodgers Association largely asked Weiler why they were being asked to step up to provide more tax dollars for the ventures he hoped to fund, while other sectors such as retail and restaurants would continue on without any additional tax burden.

Murri’s portion of the presentation was devoted to citing the benefits of more and better athletic events in town. For his part, Weiler explained that he believed the tax hike would benefit lodgers through an improved, well-funded PSCDC.

As reported last week in The SUN, Weiler has approached several organizations over the past few weeks with his idea for a lodgers tax hike. That additional two percent would be split between the PSCDC and the Town Tourism Committee, with the TTC’s portion dedicated to funding events.

As Weiler told Lodgers Association members Tuesday night, “If we could all sit back in seven or eight or nine years and talk about what we did today, the thoughts that we had, the courage that we displayed, and we end up with five or six nationwide or world-renowned events, that over the course of the summer attract between five and 10 thousand people here, they’re people of substantial means — remember the $10,000 bicycle — I think that we’ll be able to say to ourselves, ‘Boy, what a great journey it’s been.’

“Is it going to require courage on your part?” Weiler continued. “Of course it will. Will it require you to think outside of your current comfort zone? Yes, indeed it will. You already did that in 2003, 2004 and 2005. And the reason all of you are here are the results of that.”

Weiler was referring to owners of lodging establishments (in the town) eventually accepting an increase in lodgers tax in order to fund tourism promotion through the TTC.

In 2006, Pagosa Springs voters approved raising lodgers tax by three percentage points, as well as dedicating the total of that tax to funding tourism promotion. That vote codified the tax dedication in the charter.

“Is it going to be easy?” Weiler asked the Lodgers Association members. “Of course not.”

The path toward initiating a boost in the area’s lodgers tax would not be easy. Not only would area voters need to approve the tax increase, but they would also have to vote to amend the town’s Home Rule Charter.

“So, we’re talking about a two-percent tax increase,” Weiler explained. “Half would go to specific event promotion that coordinates to the natural assets of our community. The other part goes to fund the Community Development Corporation.”

Advocating for the current configuration of the PSCDC, telling Lodgers Association members that, “It’s a wonderful resource that we have not taken advantage of as a community,” Weiler conceded, “Up until recently it’s been problematic at best and its predecessor, Archuleta Economic Development, had its issues, too.”

“As you look to the future, economic development is our goal,” Weiler asserted, saying that the Lodgers Association would, as a result of a tax increase funding the PSCDC, move up to the front of the line for economic development assistance.

Nevertheless, while members of the Lodgers Association were not entirely hostile to Weiler’s proposal, nor did they embrace the idea. Citing the fact that the increase would make the town’s lodgers tax the second highest in the state, most stated that they felt the hike would price out many potential visitors, while not benefitting proprietors of those establishments.

Weiler responded that those additional tax revenues would leverage, “a different strata” of consumer — visitors with more money — a point Weiler raised earlier when saying the tax increase would fund new, better events in the area.

Bill Hudgins, with Sunetha Property Management, said, “I’d like to be able to raise our room rates but I don’t want that money to go to the town or the county. I want that money to go into our pockets. Am I alone in that?

A majority of voices in the room assured him some agreement.

Mary Hart questioned a figure Weiler cited previously, claiming that tourism had grown 18 percent since the 2006 lodgers tax increase had gone to fund TTC efforts.

Yesterday, TTC Director Jennie Green told SUN staff that Weiler had not only inflated those numbers but said her preliminary report on tourism growth was not ready to go public.

“Actually, it’s 14.89 percent,” Green said, “and even that’s not accurate,” citing numerous variables that had yet to be included in the report. “I would not have presented those numbers.”

Green added, “It’s going to be difficult to come up with accurate occupancy rates,” as related to any supposed increase in visitors to the area over the years (as a gauge of TTC success in tourism promotion). “This (her report) is not completely fleshed out. I know there’s lots of flaws, I’m not going there saying this is awesome data. I’m not trying to sell anything, I’m just trying to make sense of the numbers.”

However, Green will present to the Pagosa Springs Town Council meeting today (at noon in Town Hall) the fact that lodgers tax revenues were up 11.82 percent in May over the same month last year. That same report shows there was $73,065 more collected in 2011 over 2007 — an almost 22-percent increase — with a steady year-to-year increase in revenues.

Citing the number that Weiler quoted, Hart claimed, “My business is down and so are those of others in this room. We’re all down; so how accurate are those statistics?”

“It really feels like the burden is being put on us again,” Hart said, adding that she was not seeing an increase in business from various events in town, even though she and other lodgers promote those events as well as donate rooms for event participants. “We’re not seeing any benefit and so, we’re really thinking, this is not something we want to see happen, Mark.”

Saying that an increase in lodging numbers benefits area retailers and restaurants, Hart asked why those sectors weren’t being asked to fund event promotion and the PSCDC.

Hart’s sentiment regarding the burden that would be placed on lodge owners was shared by every Lodgers Association member who spoke.

Rather than embracing a lodgers tax increase, member Pam Schoemig listed a number of taxing alternatives that other Colorado communities used for funding community development or other projects. “Some of those other areas need to be explored more,” she added. “I don’t think we should have to support CDC.”

Chamber of Commerce Director Mary Jo Coulehan also asked for an investigation of alternative revenue sources. Saying that her comments at the July 9 PSCDC meeting had been misinterpreted as support in last week’s SUN article, Coulehan added, “I think it’s easy to look at and it’s considered the low-hanging fruit ... there are some other communities out there that are doing some very creative work without increasing taxes, and it is spread out amongst all the businesses including retail, including restaurants.

“If you’re going to support organizations like CDC, like events, you’re going to need a broader perspective,” Coulehan said. “I believe that there are some ideas out there that I’d personally like to pursue, that will continue to bring in money, that will not do a tax increase, and I think it will spread the wealth, and I think we’ll be able to invest in our community.

“This community is going to have to change; it’s going to have to change the way it does business,” Coulehan concluded. “And I think that’s going to be the hardest thing to do.”

Given the tenor of comments from Tuesday’s participants, most members of the Lodgers Association appeared to side with Coulehan, agreeing that other ideas should be explored and discussed.

While no decisions were reached at the meeting, it was clear that the matter was far from over and that the dialogue would continue.

Saying that he was certain members of the Lodgers Association would not, “lie down immediately” to embrace his proposal, Weiler concluded, “If some of my suggestions cause you to think differently at some time in the future, I’ve accomplished my goal.”

“I didn’t expect to get unanimous support for this tonight. I didn’t expect this to be a one meeting discussion.”

jim@pagosasun.com

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