A proposed 2 percent accommodation tax would be explicitly for airline funding but would not generate the entire amount needed to secure flights into Routt County, Lodging Committee Chairman Steve Dawes told the city's Tax Policy Advisory Board on Thursday.
The board quizzed Dawes on the Lodging Committee's discussions about the lodging tax proposal, which is in its preliminary stages. The tax would generate about $1.2 million annually to fund airline flights into Routt County. It would be in addition to an existing 1 percent accommodation tax dedicated to improving city amenities.
If the lodging committee decides to move forward with the proposal, the accommodation tax would need voter approval and could be on the ballot as early as November. The lodging committee plans to present its proposal to its board July 13 and then continue to the Steamboat Springs Chamber Resort Association and the City Council.
Through the Fly Steamboat program, lodging businesses currently ask visitors to pay a voluntary fee to support the air programs. The Steamboat Ski and Resort Corp. funds the bulk of the program, with help from the city and voluntary contributions from other businesses.
The lodging committee's proposal would make its share mandatory. But to cover the costs of the air program, other businesses would have to continue their voluntary contributions.
"There is no fair and equitable basis. The reality is if we want to do it, the lodging (community) needs to take the leadership and do it alone," Dawes said.
Dawes said the Lodging Committee is working to get a funding commitment from Ski Corp. to go with the tax and hopes other businesses will continue to contribute to the air program on a voluntary basis.
Tax policy board member Audrey Enever asked whether the Lodging Committee would consider using the revenue for anything other than the air program in the future, such as improving public transportation.
Dawes said absolutely not and noted that the tax would bring a more predictable revenue source for the air program.
Board member Wade Gebhardt worried that the added accommodation tax, which would increase to 3 percent, would close the door on using a lodging tax for other city needs.
"It's an opportunity the city no longer has," Gebhardt said.
Other members questioned whether it would make more sense to put money into improving Yampa Valley Regional Airport terminal, which needs to be expanded to provide more winter service. Board member Jack Dysart wondered whether using the tax to pay off a bond for airport improvements would provide more "bang for the buck."
Chamber Executive Vice President Sandy Evans Hall said she doesn't foresee, in the next 10 years, getting flights to come to Routt County without paying for them.
"You have to understand, airlines don't fly here without minimum revenue guarantees," Evans Hall said. "To think we could just build a airport and they will come, to think these flights are going to come regardless is not the case."
Other members questioned a tax dedicated to primarily bringing more tourists into Steamboat Springs.
"What do we get out of it? There is a certain segment of the population that doesn't want to get more tourism," said Tax Policy Advisory Board Chairman Kenneth Solomon. "A certain segment of the population and members on this board don't need more marketing to survive in the community."
Board member Fred Wolf noted that even if the tax is for marketing, it could be beneficial to more than just the lodging industry.
"Fifty to 70 percent put dinner on the table because of tourism. It is a sustainable part of the economy," Wolf said. "This is something for the whole community. This isn't just for the lodging community. We all benefit from it. So does the city in terms of sales tax."
Typically, Ski Corp. has funded the majority of the revenue guarantees. Last ski season, Ski Corp. put up $1.02 million, businesses pledged $680,000 and the city promised $100,000.
The estimated cost to the program last winter was $1.7 million, down from $2.3 million the previous winters.
Historically Ski Corp. has signed the contracts with the airlines and assumes the responsibility for any shortfall in the revenue guarantees.
Dawes said he foresees Ski Corp. managing the air program in the short term, and until there is another entity with the experience to be comfortable with the job.
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