Measure to hike Ridgway lodging tax for housing, child care draws no official supporters, opponents

The last time Ridgway voters considered a lodging tax increase in 2015, there was a clear group of proponents – including the Ridgway Area Chamber of Commerce itself.

But this time, no official group has stepped up to champion the measure on the Nov. 7 ballot. The lead up to the election has been devoid of campaign signs, forums and letters to the editor urging votes one way or another. No one has emerged to oppose it, either.

The discussions in town council meetings about whether to put the question on the ballot have occurred off and on since August 2022. But since the town council finalized ballot language more than two months ago, asking to increase the lodging tax and designate a portion of it for affordable housing and childcare, it has been pretty much radio silent.

The town is asking voters to increase lodging tax by 2.5 percentage points – an estimated $110,000 per year – and adjust the share of that tax revenue dedicated to tourism promotion and economic development. The measure would set the lodging tax at 6% and dedicate up to 50% of the proceeds to tourism. If approved, the measure would allocate the other 50% to affordable housing and workforce housing projects, early childhood care and education, and programs to fund homeownership.

Currently, the Ridgway Area Chamber of Commerce receives the majority of the lodging tax funds – 2.45% of the total 3.5% lodging tax – through a contract to market the town and operate the visitor center. That three-year contract expires at the end of 2023. Even with the proposed 50-50 split of the lodging tax revenue, the chamber is expected to receive more money than it does now.

If the tax increase is approved, visitors would foot the bill for the first dedicated line-item funding for affordable housing projects in Ridgway. Until now, the council has dealt with these requests individually, with developers asking for the town to waive or absorb development costs.

If the measure is rejected, nothing will change and the town will continue to collect the 3.5% lodging tax, with 70% of that money going toward tourism promotion and economic development, and 30% of the money retained by the town.

The last time a lodging tax increase passed

Before the last lodging tax measure passed, the lodging tax was $2 per night, split evenly between promoting tourism (through a contract with the chamber) and town improvements. Voters agreed to increase the lodging tax to 3.5% and to earmark 70% of that money for tourism promotion and economic development. The town retained the rest.

At the time, the chamber director couched the measure as a “compromise” with the town, saying that lodging taxes generally were reserved wholly for tourism promotion, according to Plaindealer reports.

Eight years ago, the lodging tax increase passed with about 70% of the vote.

After the measure passed, the chamber vowed to apply for matching grants, visit with businesses to determine goals for tourism promotion and expand Ridgway’s online presence. It obtained grant funding to help boost visitation during shoulder seasons.

But the landscape has changed since the last time voters considered lodging taxes.

Ridgway’s leaders have debated about whether the town actually needs to be promoted anymore. Some have vacillated between saying Ridgway has “been discovered” and citing concerns that visitation is slowing down. Others in the community have raised concerns about popular places being “loved to death,” including the nearby Blue Lakes trail leading to the Mt. Sneffels Wilderness. The U.S. Forest Service has proposed limiting the number of hikers and campers there to mitigate the human impacts, including problems with fecal matter, litter and wildlife.

Some councilors have expressed concerns about continuing to promote a place that continues to attract more visitors – including those who aren’t the most conscientious guests.

But other councilors have said they want to have a dedicated source of funding for affordable housing and this measure would provide a conduit for such money.

The town faces different problems than before – and some have argued it has different priorities. The lodging establishments who would collect the tax and remit it to the town have issues finding affordable housing for their own employees, in some cases.

At first, the proposal to have the ballot question focused on a dedicated funding source for only affordable housing projects.

Later on, the council received a pitch to also include child care as part of the possible spending of increased lodging tax funds. Councilors later agreed to add the child care spending provision, citing concerns that housing and child care are inextricably tied together in the workforce.

During that July meeting, Ouray County Commissioner Jake Niece lobbied publicly for including child care as a beneficiary in the possible lodging tax increase. The county has explored putting a lodging tax on the ballot as well, but state laws allowing governments to dedicate lodging tax toward child care and affordable housing or “enhancing the visitor experience” allows those election questions to be presented in general elections or special elections. That means 2024 would be the next opportunity, unless proponents paid for their own special election.

Niece serves on the board of the nonprofit Home Trust of Ouray County, which has a mixed-use project planned for 660 Sherman St. including a child care facility, affordable rentals and commercial space.

Groundbreaking is tentatively scheduled for mid-2025, if funding comes together.

Tourism promotion

If voters approve the measure, higher lodging tax dollars are expected to also increase the amount of money going to the Ridgway Area Chamber of Commerce.

In 2022, the chamber received $101,671 from the town’s lodging tax, according to the town.

When using the 2022 lodging tax numbers, a 50-50 split with 6% lodging tax would have netted the chamber $126,393.31 – almost $25,000 more than it received with the current formula.

The ask comes at a time where the town’s future relationship with the chamber is uncertain.

Town leaders discussed renewing the chamber’s contract on a year-to-year basis, requiring more specified outcomes from the entity and deliverables with clear deadlines. This was after a previous meeting where town councilors asked the chamber to be specific about its impacts and how tax dollars were being spent.

The town council also discussed the possibility of bringing marketing and tourism services under the town’s umbrella, which would eliminate the need for an outside contract.

At the town council’s July meeting, the chamber gave a report. During that report, chamber staff told councilors they had created a new Facebook page for tourism, created a new shopping map, and changed their membership to be free to all businesses. They also had a goal to meet with all Ridgway businesses by the end of the summer.

The council has three options to move forward with tourism promotion, whether or not the tax increase passes. They can either renew the contract with the chamber at the end of 2023, open up the services for a competitive bid, or bring tourism services and promotion in-house.

Councilors debated whether efficiencies would make it worth it to bring the tourism services within the town, during a conversation with chamber representatives in July.

“Let’s admit, this is an uncomfortable conversation for all of us,” said Councilor Kevin Grambley.

The council asked town staff to come up with a more specific contract for the chamber with clear goals and deliverables at the end of the year, with the possibility of bringing the services in-house. Only one councilor – JT Thomas – spoke against bringing tourism services under the town’s umbrella. The council reached consensus against putting out a bid for other outside contractors, and floated the idea of renewing the chamber’s contract for one year instead of three years.

Pro or con

As far as local lodging establishment managers are concerned, it seems some are in favor of the measure. There are only three commercial hotels in Ridgway – the largest is the MTN Lodge, previously known as the Ridgway Lodge & Suites.

MTN Lodge co-owner Ben Jackson said he supported the ballot measure, contrasting Ridgway’s current 3.5% lodging tax with Telluride’s rate of just over 15% and Montrose’s nearly 9.5% rate.

“It’s long overdue. The money going into the town’s coffers needs to be increased, and Ridgway is becoming an increasingly popular destination,” Jackson said. “I believe the increase is justified, and people should vote for it.”

Another Ridgway hotel owner was less supportive of the ballot measure. Hotel Palomino co-owner Merlyn Ellis said the increase didn’t make sense considering visitor numbers, the number of hotels in Ridgway and the town’s population.

“It seems like a quick grab for more tax dollars, and the result is three small business owners will shoulder that tax burden instead of shouldering it across all business types. It would make Ridgway less competitive compared to other places around the region,” Ellis said.

Chipeta Lodge owner Todd Mezrah did not return a request for comment on the lodging tax increase this week.

The Plaindealer contacted Ridgway Area Chamber of Commerce Director Ashley Perkins several times to ask if the chamber has a position on the lodging tax measure. She did not respond to those requests for comment.