The local Lodgers and Automobile Rental Tax (LART) for Colorado Springs raises around $4 million annually, a total that has decreased slightly the past several years, with the exception of last year.
According to the city’s 2014 budget, income from LART was $3.955 million in 2011, $3.936 million the following year and $4.023 million in 2013. The 2014 budget shows $4 million in LART revenues projected.
The city collects the taxes, the LART Committee recommends its disbursal to City Council, and Council makes the final choice about where to spend the money. Because the dollars need to be stretched further this year, and because revenue might be down, there will now be an increased level of scrutiny of applications for LART money.
At a recent public meeting hosted by LART Committee co-chairs Fred Veitch and Jan Martin, it was stressed that there will be strategic planning before recommending distribution of the money this year. Gone, say Veitch and Martin, are the days of “nod-nod, wink-wink” distribution of funds.
Previously, some applications came in late and were improperly completed, Veitch said. Despite that, funds were distributed to those who made requests.
“That isn’t how it’s going to work in 2015,” Veitch said. “We’re finding there’s more pressure on LART funds than there’s ever been.”
As advisors to City Council on LART funds, the committee will enforce deadlines and scrutinize every application. Regarding the income stream, Veitch said, “If this was a business and it was this flat, we’d be firing ourselves.”
“We have a pretty good chunk of money here,” Martin said. “I think the question we’re asking is — have we been using that in the most strategic way possible over the past several years? We want to look at the ordinance [that created LART] and be more strategic in how those funds are spent.”
The committee also inquired how to increase the bottom line. The simple answer is to raise the tax percentage. If 3 percent raises roughly $4 million, another 3 percent could raise another $4 million. Or if 3 percent more is too steep, ask voters to approve 2 percent and raise $2.67 million or 1 percent to raise half that, or $1.3 million annually.
“There’s more pressure on LART funds than there’s ever been.”
– Fred Veitch
Yes, painless. The money does not come out of our pockets; it is paid to city coffers from people who vacation here.
I know no one who refuses to vacation at a certain locale because of the lodging tax. Do you? Think of your own vacations.
Veitch asked this very question.
“Just think of what we could do with $6.5 million or $8 million,” Veitch said, suggesting that money could develop and market the region as a year-round destination.
Another angle is to look at the rates and bottom lines elsewhere. Other cities along Colorado’s Front Range raise far more money from their lodging tax.
Compare Colorado Springs’ 2 percent lodging tax to that of Denver at 10.75 percent, Boulder’s 7.5 percent; Pueblo’s 4.3 percent and Fort Collins’ 3 percent.
Of course Denver is much more the megalopolis than Colorado Springs. But we have tourist attractions, several forests and a Fourteener right outside our front door. Denver has the state Capitol. And you have to fight traffic for several hours to get to its closest Fourteener.
Last year, Denver’s lodging tax raised $63,482,000, according to the city’s auditing department. That money came from between 45 and 50 hotels within the city limits.
Farther north, take a look at Fort Collins’ lodging tax collections, increasing annually, while ours have been essentially flat. In 2011, Fort Collins collected $908,908. The following year, the city’s lodging taxes amounted to $1.012 million, then increased to $1.103 million in 2013. So far this year, the increase is 10.76 percent, year over year as of May, according to its finance department.
In 1978, Colorado Springs City Council approved imposing the tax, 2 percent assessed to hotel and motel bills and 1 percent added to rental car payments. The money was designated to help promote the area. The tax was implemented by the city without voter approval; it was passed before the Taxpayer’s Bill of Rights, or TABOR, was approved by voters in 1992. TABOR requires a vote of the people to raise any taxes.
Recently, two-thirds of LART funds have gone to the Convention and Visitors Bureau and the other one-third to various events, “events we hope will attract people from the outside,” Martin said.
But it could be so much more. nCSBJ