For years, Colorado Springs quietly has collected and utilized the revenues from a Lodgers and Automobile Rental Tax. By comparison with other cities our size and larger, we’ve never turned the LART tax into a gold mine, charging only 2 percent for lodging and just 1 percent for car rentals in addition to the usual state and local sales taxes.
One could argue, and many have in recent years, that Colorado Springs is missing the boat. Just go to almost any other tourist destination, check out the fine print on your hotel or car rental bill, and you’ll see a big difference.
Put it this way: Would any visitor to the area refuse to stay here, or perhaps not return in the future, if those rates were doubled? The difference, for those who need help doing the math, would be an extra 10 bucks on a $500 hotel stay, or perhaps $3-4 more for a typical weekly car rental.
The answer, of course, is that area visitors don’t notice the LART tax — and wouldn’t pay attention to an increase. Yet for some reason we continue to be scared of taxing visitors a little more, having charged the same rate for nearly two decades.
That revenue, by the way, doesn’t disappear into a black hole. According to the city’s website, it has to be used “for tourism or economic development purposes.” Much of the LART money goes to the Convention and Visitors Bureau, but smaller amounts are given as grants to help events that attract tourists to the area.
There’s no better case in point than the annual Colorado Balloon Classic, which has been around since the 1970s. It’s a staple of the Labor Day weekend, marking the end of summer. Because there’s no event close to it in Colorado, it brings scores of balloonists and their entourages to the area — not to mention many others within a day’s drive.
They come here, they spend money while in town (there is no admission charge), and the result is millions in economic impact. So, one would think, the city could make the Balloon Classic its poster child for LART. Yet, we’ve watched in dismay as the air show’s organizers have battled in recent months with the city over increased charges for city services at the event, specifically a decision to barricade streets around Memorial Park during those days.
Instead of quietly absorbing the added costs, the city’s first thought was to charge the Balloon Classic organizers an extra $6,596. That might not sound like a huge amount, but when you’re running an event on a tight budget, it is. The organizers responded by looking into moving the Classic away to somewhere else in El Paso County, which would not have been the same. When all those balloons go up each year from Memorial Park, people can see and enjoy them throughout the area. That wouldn’t be the case if the site were miles away.
Thankfully, City Council put an end to the nonsense, agreeing to use a little more LART money for that $6,596 bill. But the local LART continues to be an under-utilized tool, and the time has come for the city to consider a new strategy. Charge a little more, turn what has been $3-4 million a year into $6-8 million (or more), and put it to good use helping local events as well as better promoting the area.
We’ve talked about this long enough. It’s time to do it.