Our View: Lodging tax makes sense

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A proposed tax on lodging to pay for airline flight guarantees makes sense and would have direct benefits for the community.

The proposal -- an increase in the accommodations tax from 1 percent to 3 percent -- was unveiled at a recent Steamboat Springs City Council meeting. The Lodging Committee of the Steamboat Springs Chamber Resort Association noted the proposal has not been finalized. Neither the committee nor the chamber has voted to pursue the tax.

While the specifics have yet to be ironed out, the concept of the lodging tax is logical, and we hope a plan comes together that can go on the November ballot.

Airline flight guarantees are funds paid to bring jet service into Yampa Valley Regional Airport from markets such as New York, Minneapolis, Dallas, Houston and Chicago. Without them, the airlines would not fly into YVRA.

Historically, the Steamboat Ski and Resort Corp. has put up the biggest portion of the flight guarantees. The Chamber raises about 40 percent of the revenues from local businesses, and the city of Steamboat Springs chips in. During the 2003-04 ski season, Ski Corp. put up $1.02 million, businesses pledged $680,000, and the city of Steamboat Springs promised $100,000.

But the current method of funding is hardly ideal. Though all businesses benefit from the jet flights, they do not contribute equally to the program. Some businesses do not contribute at all.

A lodging tax would stabilize funding for the flight guarantees, and it would ensure that lodging properties contribute to the program equitably.

We think such a tax is smart politically. As the city looks at its overall tax structure, one area of opportunity for new revenue is an increased accommodations tax. But if there is a new tax on lodging, the revenues should be used on programs that directly benefit the industry. Flight guarantees do that.

A lodging tax should appeal to voters. In 2001, residents shot down the so-called "3-2-1 tax" to pay for flight guarantees, which included taxes on lift tickets, restaurant meals and other amenities, as well as lodging. By limiting the tax to lodging, the impact on residents is minimal -- essentially, the tax charges visitors for the flights that bring many of them here. If such a tax is approved, the city could cease contributing to the program to underscore that no other tax dollars are being used.

Such a tax also would provide for increased accountability and oversight. Ski Corp. has managed the program and has offered to allow contributors to inspect the program's books. But that's not the same as having an appointed board that is accountable to the public for how the funds are raised and spent.

As proposed, the lodging tax is 2 percent and would raise an estimated $1.2 million per year. That's half of the $2.3 million to $2.5 million that flight guarantees cost annually. The Lodging Committee has not said where the rest of those funds will come from, but we think it has to be Ski Corp.

Steamboat is a destination resort, and the jet flights are critical to Ski Corp.'s success. Lodging tax revenues should augment, not replace, Ski Corp.'s contributions to the program. It seems the success of the tax depends on the company's level of partnership.

If those things come together -- and we think they can -- our resort economy will be the winner.

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