Time ticking on whether to ask voters for Durango lodgers tax increase

The city of Durango and community stakeholders are running out of time to agree on a lodgers tax increase and put it on the ballot in April.

Durango’s lodgers tax, paid by people staying in hotels and motels, is one of the lowest in the state. The community has unsuccessfully tried multiple times since 1990 to increase the tax, currently set at 2%, and finally, diverse stakeholders have an agreement on a proposed increase of 3%.

Durango City Council has some ideas of its own and faces a deadline of Feb. 2 to come to agreement.

“I think we’re really close to getting everybody everything they want, but it doesn’t all fit into this 5% balloon,” said Mayor Dean Brookie at a City Council meeting earlier this week.

The city collects about $1 million in lodgers tax revenue on average, although it took in less revenue in 2020 because of the coronavirus pandemic.

Money from the tax supports Visit Durango, the downtown trolley and special events, such as Snowdown, Taste of Durango and the Iron Horse Bicycle Classic.

One goal of the tax increase is to give more money to Visit Durango so it can promote sustainable tourism, which would spread more tourist visits out over time by pushing for more tourism during shoulder seasons.

Another possible beneficiary, arts and culture groups, would be able to use the steady stream of funding to build the creative economy into an economic engine. Transportation would also receive some portion of the money to encourage use of mass transit.

“The Durango Creative District that we created has the ability to bring in millions of dollars over time,” said Councilor Melissa Youssef. “We’re trying to tap into that, but they need the resources to do that.”

The debate about the tax comes down to numbers.

Stakeholders support the 3% increase, saying anything higher would not gain enough support. Some council members have considered the idea of increasing the tax by 3.25% or 3.5%.

Currently, lodgers collect a total of 10.4% in taxes on stays at hotels, motels, campgrounds and vacation rentals within city limits. With the increase, Durango would collect 13.4%.

Visit Durango has asked for 65% of the proposed 5% tax, while the Durango Creative District has asked for 15%.

In a draft resolution, the city allocated 50% to tourism marketing, 10% for arts and culture, and 20% for a limited-use tourism impact fund.

Councilors Kim Baxter and Barbara Noseworthy have also advocated for more transportation funding.

“With an increase in tourism, how are we going to get tourists to use mass transit? Just saying it doesn’t work isn’t an option for me,” Noseworthy said.

Stakeholders have another chance to offer input Tuesday when councilors hold a special meeting about the proposed lodgers tax increase.

“I think this is a critical time ... to get a tax passed,” Youssef said, adding that it was vital to get enough support for the proposal. “I was really hoping that we can be very clear and very simple. I think that’s going to be key for success.”

smullane@durangoherald.com