Voters support tax for winter air service program
November 1, 2011
Steamboat Springs — The sales tax rate in Steamboat Springs will go up a bit after voters here resoundingly approved Referendum 2B on Tuesday, a 0.25 percent tax increase that will help fund the winter air service program at Yampa Valley Regional Airport.
Referendum 2B passed with 61 percent of the vote.
Donning pilot hats and inflatable airplanes, about 40 supporters of the tax initiative celebrated its passage at Old Town Pub on Tuesday evening.
"We knew from the beginning that if everyone understood how important this was to our economy, then we had a good chance to pass it," Yes 2 Air campaign manager Bill Stuart said. "It was a nonpartisan issue. People from all spectrums of life supported it."
Referendum 2B was conceived by a group of community leaders to reverse the eroding ability of the business community to attract commercial airline flights to YVRA during the ski season. Without those flights, advocates of the tax fear the resort community's ability to bring in high-spending winter vacationers would be compromised, further eroding the local tourism economy.
Steamboat Ski & Resort Corp. President and Chief Operating Officer Chris Diamond praised the air tax passage Tuesday night.
"It was a very exciting night for us," he said. "You never know how these things are going to turn out."
Diamond said campaign leaders now would turn their attention to developing a plan that will best spend the additional tax revenue to regain airline seats lost during the recession.
Referendum 2B's 0.25 percent tax will generate an estimated $1.3 million annually and will sunset after five years.
Supporters said the additional revenues will enable the air program to get back up to 160,000 inbound airline seats by 2016. Advocates also said they were optimistic that after five years the air program's reserve fund would be back on solid footing. If that proves true, they say, they would not have to go back to the voters to renew the tax.
Tax proponents made the case that mergers among the airlines that historically have served the Steamboat market, Northwest with Delta and Continental with United, had reduced competition. Add to that reductions in airline fleets, which in turn placed a premium on the most lucrative business travel destinations, plus the rapid escalation of jet fuel prices, and the $2.5 million in revenue guarantees the resort community committed to securing airline service for the winter of 2005-06 no longer stretched as far.
The airline fund's reserves, which are managed by a Local Marketing District overseen by Steamboat Springs City Council, had slipped from $1.5 million to less than $1 million. Referendum 2B supporter and former City Council President Loui Antonucci said without new revenues, the reserve was projected to go to zero by the 2012-13 ski season.
The resort community concluded that simply increasing the accommodation tax would make Steamboat less competitive with Summit County and Vail when bidding for group travel from ski clubs.
Antonucci said Tuesday that the immediate result of the tax increase will be to restore lost seats starting with the winter of 2012-13. It also will allow Steamboat to look into restoring lost airline markets in locations such as Salt Lake City. He said plans to pursue routes on the West Coast will be discussed during the next five years.
"We cannot control what goes on in the nation or the world, but we can take control of our own destiny, and that's what we did in this election," he said.
Opponents of the tax questioned the use of taxpayer dollars to help subsidize an airline program that they said supported private business. Some opponents also questioned the transparency of how the tax dollars will be spent.
— To reach Tom Ross, call 970-871-4205 or email tross@SteamboatToday.com
— To reach Scott Franz, call 970-871-4210 or email scottfranz@SteamboatToday.com