Bill Moser: ‘Yes’ to Referendum 2B

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It is a challenge for anyone to take a complicated issue and make it understandable and concise. Referendum 2B is intended to bring the number of inbound and outbound seats during our winter season back to its previous level and to re-charge the program. This program will fail within three years if nothing is done.

The Local Marketing District (LMD) has been able to support airline guarantees to various carriers that enable them to serve a small market like Steamboat Springs. Referendum 2B will establish a general sales tax of 0.25 percent. It would cost 25 cents for each $100 spent within the city, with the average annual cost per family of $50.

Although this is a modest sum, it will have a great impact on our economy. The business model followed for many years that brings skiers to Steamboat Springs on direct flights from cities such as Dallas, Houston, Chicago, New York and Minneapolis will be terminated.

The loss of these direct nonstop flights will cause an enormous economic loss in spending in our town. This means a loss of jobs. It will affect the employment of stock clerks, dishwashers and retail salespeople.

We will be left with only the Denver-to-Steamboat flights. This will hurt the location-neutral professional and second-homeowners who now enjoy the ease of getting in and out of town.

Without direct nonstop air service, Steamboat will be at a competitive disadvantage to other Colorado ski areas who maintain their direct nonstop air programs. Those families that currently enjoy direct flights will likely change their ski vacation preference to destinations that simply are easier to access via nonstop flights.

The result of a “yes” vote will be to sustain the airline program that has provided broad-based benefits to year-round residents as well as second-homeowners. It has introduced many new people to our active lifestyle and small-town way of life.

The current airline program is in jeopardy not because of the LMD and its administration but by factors well beyond Steamboat Springs city limits. The cost of aviation fuel, airline consolidations and the use of smaller and more fuel-efficient aircraft have reduced our airline capacity by 27 percent during the past three years. Additionally, the dollars generated by the 2 percent lodging tax have declined significantly because of the drop in average daily revenues due to price competition compounded by a shrinking percentage of occupancy. The reserves in the LMD have dwindled and will be depleted by 2014.

Steamboat Ski and Resort Corp. has supported the airline program and will continue to support it with $1.1 million. This will not change from today’s level of support. The new tax is anticipated to generate $1.3 million. This will be adequate to regain the seats we have lost, to build our tax revenues to pay for city services and to increase the airline capacity to greater than previous levels.

Referendum 2B is a reasonable, broad-based response to a very difficult situation we all face. We all will benefit from a “yes” vote.

Steamboat tends to pull together when it faces a problem. We clearly have a problem and a reasonable solution we should all get behind. This tax, which may help a private entity, should be accepted as a tax that will benefit us all. My hope is that I have made a complex ballot initiative more easily understood as well as easier to vote in favor of. Please vote “yes” on Referendum 2B.

Bill Moser

President, Mainstreet Steamboat Springs board of directors

Comments

Stephen Evans 2 years, 6 months ago

My taxes should not be used to susidise the ski corp, The chamber of commerse,ski shops, or you and lodging industry. Perhaps if ski tickets and lodging were more affordable Families would return to steamboat. How many tourist communities pay off airlines with tax dollars? I asked a chamber of commerce in a tourist island in FLORIDA if they get tax money from the city or county. The answer was" NO, the chamber only supports its paying members so it would be illlegal." That would like giving tax monies to just one church. Why have government and politicians decided to Bailout or subsidise buisness? What happened to free enterprise? Price your product properly and the public will come. Captn Steve

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cindy constantine 2 years, 6 months ago

Why should the taxpayers bailout ski corp when nothing creative or new has been done to create DEMAND for the seats? And now our daily ticket prices are the highest in North America! They are asking the taxpayers to throw "good money after bad" and it is too much of a burden to put on the locals and the surrounding county residents who see Steamboat as their "shopping center". According to the Tax Advisory Committee (made up of long term local residents) who have been working on a detailed tax analysis, only 35% of tax dollars are created by tourists meaning the other 65% are created by shoppers from Routt, Grand and Moffat counties. The winter guests are shrinking as the summer business grows in Steamboat. We are not providing any airline incentives for the summer guests. Vote NO on 2B.

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Scott Wedel 2 years, 6 months ago

"The current airline program is in jeopardy not because of the LMD and its administration but by factors well beyond Steamboat Springs city limits."

Well that is the claim, but no evidence presented to support it. Looks like Vail Resorts is able to operate their air flight program for much less than it costs us. When the Chamber's CEO claims in a letter to the editor that 44,000 additional seats will bring in 44,000 additional tourists then the administration of this program is shown to be inept or deceitful.

The reason airline subsidies can cost such different amounts is because it is not a direct subsidy, but revenue guarantees. So when Vail Resorts books enough passengers to fill their planes close to 70% and make their revenues then they don't have to pay on the guarantees. And when Ski Corps fills the planes here to just over 60% then they miss the revenue guarantees and have to pay lots of money.

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Scott Ford 2 years, 6 months ago

Hi Wayne - I appreciate your passion for education and your willingness to serve on the RE2 School Board. Thanks for doing the math outlining how much (little) Proposition 103 will cost the typical Colorado household. - The core problem is that taxes are sneaky little devils. Once they get a foothold they rarely go away. For the most part we fool ourselves into thinking that the "sunset provision" makes it OK. In reality what happens is that at the end of 5 years there will be a long list of programs dependent of this tax making extending the vote "critical" to education - so we vote to renew the tax often with no sunset or a sunset that is 10+ years. I told you taxes are sneaky little devils.

As you state it is only $.50 per day for each Colorado household - essentially this is presented as no big deal. The math is simple .$.50 x 365 = $182 annually. Combine this with the increase in sales tax being requested by Referendum 2B and the typical Routt County household (costing $50 per year) is now paying close to an extra $250 a year.

Many companies have not given their employees a raise in 2 to 3 years and/or cut hours back. To put this in perspective according to US Census data the average Routt County working individual is working a 35 hour week (this includes all combinations of all jobs) 48 weeks a year. (This is based on 2009 data - my best guess the 2011 reality is lower.) This equates to 1,680 hours annually - Assuming 2 working people per household just to say even to offset this increase in taxes are going to need each a $.07 per hour raise. ($250/(1,680hrs x2)).

When is enough - enough? As a school board member this is a question I need you to be asking all the time.

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Scott Ford 2 years, 6 months ago

Sorry guys I posted this on the wrong page. I was responding to Wayne's editorial. I obviously need another cup of coffee this morning.

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Scott Ford 2 years, 6 months ago

Hi SteamboatScott – (Yea, yet another “Scott” in the blog exchanges.)

My guess is that most of the Yes on 2B Committee has flown out of Hayden. I am not too sure that needs to be qualification for being a supporter or opponent to Referendum 2B.

We know is this about locals’ utilization of air service during the summer and winter. During the core winter season Mid December – End of March / about 11% of the passengers are “locals”. During the summer season (June – September) 50 to 60% are locals. The balance being business travelers, friends and family, and part-time residents. The classic destination vacation travelers on the summer flights are not the dominate passenger demographic. Essentially every summer season flight has a few destination vacation travelers, but not many. (The source of this data is from the Ski Corp and Chamber departure surveys.)

Reliable year round air service is an important economic infrastructure for Location Neutral Businesses (LNBs). To a great degree LNBs seem to figure out how to meet their transportation needs. Often it involves driving to Denver or catching a flight out of Hayden to Denver. Scheduling, expense, time and weather become the important factors in the decision whether to drive or fly to Denver. Luckily our relative proximity to Denver (4th busiest airport in the nation) is a blessing. Once LNBs can get to Denver by whatever means – they can get to where they need to go.

In the ideal world, I hope the year round air service out of Hayden expands to include a destination to the west. Salt Lake, Las Vegas, (Los Angeles or San Francisco areas.) At this point I will take any one of them. During the Spring/Summer/Fall months we typically average between 2 and 3 United Express Flights out of Hayden headed to Denver daily. I would like to see a flight headed west. It might take a revenue guarantee arrangement to make this flight happen. I wonder if the proponents of Referendum 2B would support this or is the focus solely on winter visitor traffic. I am just curious – what do the supporters of 2B think. Anyone else interested in the answer to this?

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sledneck 2 years, 6 months ago

When you put it in a light like captnse and Cindy (with which I certainly agree), isn't this EXACTLY what the 99% are complaining about? Corportaions getting bailed out at the common man's expense??

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canyonwind 2 years, 6 months ago

Taxes going up is never a good idea but this is not what it appears. If you work in the service industry your job may depend on this thing passing. The thugs that run the airlines are saying they will not land here unless we pay our "protection money" we are a resort town that depends on winter tourist flying in and they know that, that is how the game is played. This is in alot of ways not a tax its the way business is done in New Jersey, Oakland, or East Los Angeles or just think of it as the Sopranos come to Steamboat. The people I don't understand are the fools that will vote to close the pot shops killing a sales tax source then voting for Prop 103 because they think we need more tax $$$. Those are the people that will never understand the way the world works and the some 70% of voters that vote by alphabet, are they a (D) or a (R) they never bother to research who or what they vote for and that is bad when you have research tool right there in your face.

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vanguy 2 years, 6 months ago

It seems to me that the success of tourism benefits a lot more businesses and jobs than just the Ski Corp and the Lodging Companies. Yet, more than 95% of air service funding has come solely from these two groups up to this point.

Most people I know who live in Steamboat (and actually work for a living) seem to understand the direct connection between their paychecks and the dollars spent by tourists.

This culture is why Steamboat has such a great reputation for hospitality, when compared to other mountain destinations. This culture is why visitors come back for repeat visits.

As a community, let us NEVER lose sight of the fact that the paying traveler has a choice whether or not to visit Steamboat. It also never hurts for locals to remind Ski Corp. of this fact every once in awhile.

Air service is our lifeline as a resort community.

If it is a pain in the A$$ to get here, there are certainly more convenient destinations for people to take a ski vacation.

Non-rental second homeowners and timeshare resorts like Wyndham don't contribute any LMD tax revenue because there isn't a lodging transaction involved. Yet, these two sub-groups alone consume hundreds of air seats every week.

And how many VRBO rentals aren't paying their lodging taxes?? The city could make a small fortune investigating this issue...but I digress.

I believe the 2B Tax is a great way for non-rental tourists to contribute to air our service, especially those that use the service and don't currently help pay for it.

Me, personally, I'm voting for 2B.

I admittedly waste at least $20 every week on stupid stuff I really don't need.

I'd gladly give this community $20 a year to help secure air service, if it means that me and my friends will continue to have jobs, maybe even experience some career growth someday.

I'd gladly give this community $20 if it means our businesses can afford to stay open year-round.

Most importantly, I'd gladly give this community $20 so that, as my parents get older, and travel becomes more difficult for them, there is still a convenient and affordable way for them to fly to Hayden and visit their grandchildren from time to time.

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Scott Wedel 2 years, 6 months ago

Well, I know LNBs that fly out of Eagle so to say the choice is Hayden or Denver is not accurate.

I think, in principle, an air program is not unreasonable. I think one without any public oversight or input on where the tax money is being spent is unreasonable. I think it is unreasonable for the Chamber's CEO to submit a letter to the editor claiming 100% of new seats will be occupied and that the community will gain the benefits of that. I think it is unreasonable for supporters of a winter air program to claim it will help year round tourism.

I think if we reject this then they will address these serious flaws and put a better air subsidy program on April's ballot.

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kyle pietras 2 years, 6 months ago

This does suck, but we already pay the airlines off, this is a guarantee the money to do it will be in the budget. It's a decision... invest and make it easy for people to get here or don't invest and take the risk that people will still come here anyway....we do need tourists to pay for our habits!

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Scott Wedel 2 years, 6 months ago

The trouble is the number of empty seats is why our program costs so much. Are we stuck with more empty seats than other places? If not, then why not manage the existing program better? If so, then how much money are we willing to spend for how few tourists?

We already have tens of thousands of empty seats into Hayden so the number of people that cannot reach SB is not that great. Maybe they have to arrive a day earlier or leave a day later to get a seat, but getting here is not currently the issue.

And presumably, the current flights are the most cost effective options. So additional money will pay for flights with even more empty or more expensive empty seats. So exactly are we likely to get for the additional money? It is clear that the one thing we will not get is 44,000 additional tourists spending $44M more dollars as claimed by the Chamber's CEO.

What we are really getting is probably close to 30,000 passengers of which closer to 25,000 are tourists. And some number of those would have come anyway via ground or Denver flight. So the new flights are likely to add maybe between 15,000 and 20,000 tourists?

Is it really worth spending that kind of money year after year for that?

It is pretty silly to suggest that it will make much of a difference to LNBs that for several months out of the year that they will have direct flights to a few more cities. The LNBs are year round operations and what are they supposed to do the rest of the year? So this is no great help to the LNBs.

For that kind of money then other things could be considered that have a greater impact. Could probably have free wifi for tourists, businesses and locals which would probably do more for local LNBs (and most tourists) than direct flights for a relatively few people for part of the year. Or whatever, this is real money.

So why are we so set upon increasing taxes so we can spending so much while being so unsure at what we are getting?

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cindy constantine 2 years, 6 months ago

"The reserves in the LMD have dwindled and will be depleted by 2014" The supporters of 2B act like we will run out of airline support money tomorrow when in fact we have at least two years according to Bill's letter. There is time to go back and create a better and more equitable funding source where the community can get involved in the process. Council did not ask the important questions of the supporters before they voted to put this on the ballot and those questions need to be answered. Like how do other resort communities handle airline guarantees? Do other resorts rely on sales tax revenues to support the airlines? We have been on vacations in beach resorts where the "bed" tax is over 14% but because we are the guests we happily pay it to support the community and their sharing of it with us. Do not "drink the koolaid" on this amendment because we can get it right!! If this amendment fails a better funding source will be created before the money runs out. The ski area will open as usual and JOBS WILL NOT BE LOST BECAUSE OF 2B FAILING!! If jobs are lost it will be because of the world economy and our inability to compete in the shrinking ski biz arena.

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canyonwind 2 years, 6 months ago

Cindy I agree that we should charge more for our bed tax and I also think the free bus should be for locals only. The people that ride in from Craig should not have to pay either. If you live outside of Routt or Moffat counties you shold have to pay at least buck or two charge these rich people from New York and Texas, Let the outsiders payoff the Airline Thugs

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Scott Wedel 2 years, 6 months ago

I saw that article about the Local Marketing Board.

Looking at the make up of the board, I don't see how they can have a quorum to make a decision if members recuse themselves from conflict of interest decisions.

The board largely represents the organizations that it is supposed to be overseeing which is no good. So presumably the board would have to be largely replaced with people without such conflicts of interest.

When Scott Ford and Steve Lewis is on that board then I'll have some confidence it is capable of independent oversight. As of now, it is a farce.

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