Steamboat Pilot & Today

Steamboat Springs — The Steamboat Springs Chamber Resort has abandoned a plan to ask the City Council to put a 1.5-cent sales tax increase on the ballot and instead will seek a more focused tax on such things as restaurant meals and lift tickets, a chamber executive said Monday.

The changes, which will be proposed to the council tonight, are meant to minimize the impact on local residents and make it easier to pass the tax, Chamber Executive Vice President Sandy Evans-Hall said while speaking to a meeting of the Steamboat chapter of the Colorado Restaurant Association.

Evans-Hall estimated that 90 percent of the revenues of the new tax being proposed would come from visitors to Steamboat.

The new proposal includes a 1-percent tax on restaurant meals and a 3-percent tax on lift tickets at the Steamboat Ski Area.

"We met with individual council members (after unveiling the old 1.5-cent proposal in a public meeting May 18) and heard, 'That is never going to fly,'" Evans-Hall said.

Council members worried the previous proposal would be too onerous on locals and they would be reluctant to vote for it, Evans-Hall said.

Neither the old tax proposal nor the new one would apply to food purchased at grocery stores. And the tax question will not be placed on the ballot unless City Council agrees.

Gone from the old proposal is a tax on retail items. Instead, the tax is focused on restaurants, lodging, sports equipment rental, tourist activities and lift tickets. The old tax would have raised $4.3 million and funded ground transportation needs and municipal capital improvements as well as the ski season airline program. The new tax would raise less about $2.86 million annually which would be devoted almost entirely to the ski season jets.

The Steamboat Ski and Resort Corp. devoted $1.4 million to airline revenue guarantees last winter and the local business community pledged another $750,000. In the future, the source of ski corp.'s contribution to airline revenue guarantees would be the 3-percent lift tax. It would still spend six figures about $600,000 last year to operate and market the airline program. And it would sign the contracts with the airlines, making it liable for shortfalls in flight revenues, Evans-Hall said.

This year, Evans-Hall said the addition of daily flights from Chicago and Newark means the money the local business community must put up to convince the airlines to fly to the Yampa Valley will grow to $2.9 million. However, the new tax cannot be passed in time to fund the 2001-2002 ski season flights.

The tax proposal from the chamber is meant as a way to generate permanent funding for the airline program and break away from reliance on voluntary contributions from the business community, said John Kerst, president of First National Bank of Steamboat Springs.

"The biggest challenge we have, if we go forward with a voluntary (contribution program), is we'll continue to see it diminish," Kerst said. "And that tells me we'll see the airline program diminish."

Kerst and Bob Milne of Steamboat Resorts served on a subcommittee of the chamber board that has been working on alternative funding mechanisms to underwrite the airline revenue guarantees.

Milne told the restaurant association that the committee struggled with the decision to leave the retail sector of the economy out of the equation. In the end, it came down to what it would take to get a tax question approved by the voters.

"If you take out retail if that's really the kiss of death on this thing then you have to ask, 'How are you going to get meaningful dollars out of that?' We'd all like to see retail and everyone else kick in as a community," Milne said. "It all comes down to what is sellable."

Members of the restaurant association gave general support for the tax proposal, but some had a tough time swallowing the fact that the retail and real estate sectors of the Steamboat economy are not directly impacted by the tax proposal.

"I'm all for a tax, but retail has got to be in there," Jeff Little of the Ore House at the Pine Grove said.

And Fritz Aurin of the Smokehouse pointed out that 1 percent of additional restaurant tax provides an incentive for people renting condos equipped with kitchens to shop for groceries instead of eating out.

However, Dave Sybert of La Montaaid he thinks the resort community needs to find ways to expand the airline program, not just maintain the status quo.

"We cannot grow our program without something like this (tax)," Sybert said.

City Council is expected to hear the chamber's proposal at 6:15 p.m. today at Centennial Hall.