Following debate over its intended purpose, the Cortez City Council approved, on first reading, the ballot language for a proposed 4% increase of the city’s lodgers tax.
After its preliminary approval during the council meeting July 28, the ballot question will face a second and final reading during the City Council meeting on Aug. 11. If approved by City Council, it will officially be presented to Cortez residents to decide in November.
According to the proposed ballot language, short-term rentals, hotels and motels would be required to collect 6% tax from bookings, up from the usual 2% which has remained unchanged since 1981.
“This is not a property tax or anything of the sort. This is solely on people who come here and use lodging services,” City Manager Drew Sanders said during the July 28 council meeting.
In its news release announcing the potential lodgers tax measure, the city again clarified that Cortez residents would remain unimpacted by the increased tax, which is targeted toward tourists. Sanders, in his presentation to council, estimated that the increased lodgers tax could bring in $750,000 per year for the city, based on the city’s current three-year average of $250,000 in lodgers tax revenue per year.
In past years, Cortez allocated lodgers tax revenue to Mesa Verde Country and the city’s beautification grant that provides businesses with funding to improve their facades. Mesa Verde Country received $125,000 of the $251,000 collected in lodgers taxes last year for tourism marketing this year. This year, the city also plans to spend around $25,000 from lodgers tax revenue toward tourism data collection.
Based on the ballot language, the heightened lodgers tax revenue would be directed toward advertising the city to tourists, supporting economic development, improving infrastructure and investing in arts and culture.
Councilor April Randle disagreed with the investment plan, proposing instead that the city direct funds toward municipal water infrastructure. The preliminary funding plan for repairs and replacement – which is under evaluation by the city and council – recommends the city allocate millions of dollars exponentially increasing into the tens of millions over the next 20 years to water projects. According to SGM, the Western Slope-based engineering firm working to craft the plan, the city has 71 miles of pipes in the municipal water system reaching the end of their useful life span.
“There’s nothing more important than our water,” Randle said during the July 28 meeting. “I am proposing that we modify our proposed ordinance number 1375 to have 50% of the lodgers tax revenue go toward water infrastructure and 50% go for the uses that are outlined in the proposed ordinance number 1375.”
However, Councilor Claire West said funneling half the lodgers tax revenue into water infrastructure would be equivalent to giving 2 milliliters in blood to a patient that required 1 liter.
Councilors tabled the debate until the Aug. 11 meeting, with Councilor Bill Lewis suggesting that community input would be a crucial deciding factor in the final approved language of the ballot question.
The city invited residents to share their feedback by either attending the Aug. 11 council meeting or emailing city staff or council members their comments using their contacts found on the city’s website. The city will also organize public information sessions on the ballot question with dates yet to be announced.
avanderveen@the-journal.com
