Hayden In a worst-case scenario, a new car rental tax in Hayden could knock business down by 10 to 15 percent, Aaron Wiltfong said.
He operates Budget Rent A Car at Yampa Valley Regional Airport, and his wife, Kay, operates Avis Rent A Car. The two live in Hayden and will be among those voting on the proposed tax Nov. 3.
They'll probably be a couple of tallies in the "no" column.
"By adding that increased cost, that could convince some folks to fly into Denver and rent a car there," Aaron Wiltfong said. "And that cuts the airport completely out of everything."
The Hayden Town Council voted Aug. 6 to send two ordinances to voters. One would increase sales tax on car rentals by 3.5 percent, to 11.4 percent. The other would increase tax on accommodations by 3.5 percent, to 11.4 percent.
The Wiltfongs expressed displeasure about several elements of the proposed car rental tax. One: The money isn't earmarked for anything specific. Two: There's no end date. Three: Most of the people being taxed, tourists, can't vote on the issue.
Kay Wiltfong said she was particularly worried about the Town Council's spending of the revenue. The town has had to make budget cuts, including decreasing staffing and hours. If the town already has overextended itself, Wiltfong said, she doesn't want to give it money for more of the same.
"The Town Council's going to get a blank check to use as they see fit," she said. "This is not a temporary thing just to get them through the hardships. This is a permanent thing."
The proposed taxes have drawn the attention of Steamboat Ski and Resort Corp., YVRA Manager Dave Ruppel and the Routt County Board of Commissioners. Although none has come out against the ballot measures, all have questioned the impact the tax might have.
Currently, 33 percent of the car rental cost covers taxes and fees. If the tax passes, that would increase to 37 percent.
Town Manager Russ Martin has countered that other entities already draw taxes and fees from car rentals. His argument asks why the lid should slam on only the last hand in the cookie jar.
Aaron Wiltfong met that question with an "if everyone else jumped off the cliff" statement. He sees no reason one business should be targeted instead of others.
Town Council members have said YVRA is an untapped resource. Other airports charge hefty fees, and some cities charge taxis for each person they pick up. According to Kay Wiltfong's research, the tax increase would give YVRA the highest car rental taxes of all airports in the state: 13.4 percent. That number accounts for all taxes placed on car rentals at YVRA, not just the sales tax increase proposed in the ballot measure.
Representatives from the lodging industry haven't yet commented. That's probably because Hayden's only lodging property, the Redstone Motel, offers few short-term rooms. Owners couldn't be reached for comment Tuesday.
According to the ballot language, the accommodations tax is expected to increase only $1,200 its first year, compared with more than $100,000 for the car rental tax.
Christine O'Donnell, president of the Colorado Hotel & Lodging Association, said municipalities often head this direction in downturns.
"I can tell you that when times get tough, local cities and counties look for ways to increase their own revenues through tax dollars, so unfortunately, it's not unusual for lodging taxes and anything that would be considered a tourist passed-on tax," O'Donnell said.
Customers already experience sticker shock when they have to pay taxes and fees on pre-paid car rentals, Aaron Wiltfong said. O'Donnell noted that there was a breaking point.
"Any taxes on airports, generally it can come to the point where the consumer will actually be turned off from that, so they'll actually lose revenue in the long term," she said.
O'Donnell also cautioned that towns could give business to nearby communities if they raise taxes. Aaron Wiltfong said a car rental tax would give business to the competition.
Go Alpine General Manager Tracey Rogalski said her business offers shared shuttles and private rides to and from YVRA.
"We think it's not really going to do a whole lot," she said. "It seems to us people either want to rent cars because they like that independence, or they don't want to drive in the snow. : It comes down to a personal decision on the guest's part."
The Wiltfongs acknowledged that tourists accounted for most of their business during ski season. But they said they serve local businesses and employ local people. YVRA rental car revenues were down 20 percent the first seven months of this year compared with 2008, they said, and they've laid off workers.
"It's not that I'm totally against any kind of levy against my business," Aaron Wiltfong said. "It's where it goes, who's getting it and how long it's going to be there."