Local marketing district fuels debate

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Lodging proponent Steve Dawes and former City Councilmen Jim Engelken gave differing views of the proposed lodging tax to pay for airline flight guarantees during a debate Monday at Centennial Hall.

Ballot Issue 2A on the Nov. 2 ballot would create a local marketing district comprising most of the lodging properties in the city, but only a fraction of the city's registered voters. If approved, a 2 percent lodging tax would be implemented within the boundaries of the district. The estimated $1.25 million per year the tax would raise would be used to bring jet flights to Yampa Valley Regional Airport.

Dawes said the district would help stabilize Steamboat's resort economy and benefit those who fly out of Hayden. Engelken criticized the tax proposal, saying it did not allow the entire city to vote on the issue and did not consider the effect it would have on other community needs the city could fund through new taxes.

The Steamboat Springs Chamber Resort Association, the lodging community and the Steamboat Ski and Resort Corp. support the marketing district and lodging tax.

Dawes noted that under the proposal, the City Council would approve the district's taxing plan, appoint and remove members of the board and can dissolve the district at any time.

Dawes said that in 1999, a volunteer program was put in place where the chamber collected money for its air flight programs from the lodging community, restaurants, retail stores and other businesses. The money is used to negotiate contracts with airlines to ensure flights are available to Steamboat from major markets such as Houston, Dallas, Chicago and Newark.

"It was always the concept for the volunteer program to be replaced by a permanent funding mechanism," Dawes said.

The amount of money collected from the volunteer program has gone down in the past few years, and Ski Corp. is not in a position to absorb any more costs, Dawes said. With a lack of funding, a real possibility exists that flights could be lost, Dawes said.

Not only is the air program crucial to the destination resort economy, Dawes said, but it also benefits locals and second-home owners flying out of Hayden through better airfares and access to more flights.

The guaranteed funding coming from the lodging tax also would depoliticize the City Council's annual budget review and decision to fund the air flight programs, Dawes said.

Engelken said only 5 percent of the city residents would be allowed to vote on it and called for a citywide vote. He said the boundaries were "very narrow gerrymandering." The boundaries include about 600 registered voters. The map includes the Sanctuary, but very few other residential areas.

"The people of Steamboat Springs know what is good for them and should be allowed to participate in this discussion," Engelken said.

Engelken also objected that the tax was not part of an overall taxing scheme, which would look at ways to fund other community needs.

"How does this tax fit in with other needs of the community? A number of other special interest groups want a tax, are looking for funding sources for real problems," Engelken said.

Dawes responded that marketing districts are not a unique taxing mechanism and the group looked at other marketing districts in the state before moving forward. He also said the City Council could change the boundaries of the district and could terminate it at any time.

-- To reach Christine Metz call 871-4229

or e-mail cmetz@steamboatpilot.com

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