Tuesday, November 3, 2009
Hayden voters passed a referendum Tuesday that will increase sales tax for car rentals at Yampa Valley Regional Airport.
Based on 2008 rental car figures, Referendum 2B - which passed with 55 percent of the vote and increases sales tax on YVRA car rentals by 3.5 percent - would generate $143,500 next year for the town of Hayden.
The measure makes YVRA's car rental fees and taxes 37 percent of the cost to rent a car, according to figures previously released by Steamboat Ski and Resort Corp. Fees and taxes previously accounted for 33 percent of the cost to rent a car.
Voters also passed Referendum 2A, a measure placing a 3.5 percent increase on sales tax for nightly accommodations. The tax increase would affect some of the rooms at the Redstone Motel, Hayden's only overnight lodging business, and would generate about $1,200 next year.
Referendum 2B for car rentals passed, 191 to 158. Referendum 2A for lodging passed, 186 to 164.
The measures take effect Jan. 1. Neither proposed tax has a sunset. There's nothing in the ballot language for either tax that specifies how the revenues will be spent.
Hayden Town Manager Russ Martin said revenue created "will hopefully allow us to have a capital budget next year." Possible uses of the revenue include doing street work, strengthening the town's reserves and investing in promotional activity, he said.
"One of their primary options is to look at things that benefit the promotion of Hayden so that you can have higher returns on car rentals or lodging," Martin said Tuesday night. As the tax starts to generate revenue, Martin said he hopes to talk with representatives from affected industries about how to use the money to benefit the town as a whole, including the business community.
With a projected 10 percent decrease in overall sales tax revenue for 2010, Martin said $100,000 in new car rental revenue is a realistic estimate for the year.
Aaron Wiltfong operates Budget Car Rental at YVRA, and his wife, Kay, operates Avis Rent A Car at the airport. After learning the measure passed, Wiltfong said he hoped the increase wouldn't affect his business. He expects a price increase on rentals from the corporate level from Budget, which he said would then be passed on to the consumer.
"Hopefully, that won't persuade people to take other modes of transportation," Wiltfong said.
YVRA Manager Dave Ruppel said Tuesday afternoon that the referendum would "change the pricing structure for the rental car concessions that are at the airport." Rental companies could raise their prices to account for a sales tax increase or keep prices the same and take a financial hit, he said.
"The concern if the cost of a rental car goes up is that we're already one of the more expensive places to rent a car. The consumer may look at that and say : either, 'I'm not going to come at all' or, 'I'm not going to rent a car while I'm in Steamboat,'" Ruppel said.
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Jack Weinstein and Blythe Terrell contributed to this story.