Small percent of Aspen residents will get to vote on new lodging tax
A divided Aspen City Council voted Tuesday to let about 13 percent of the voting population within the city decide on whether a new 1 percent lodging tax should be levied on nightly room rates.
The council informally voted 3-to-2 to let the 750 or so Aspen residents who live within a proposed Local Marketing District (LMD) to vote this November on the new tax – instead of taking it to a citywide vote, which could include up to more than 5,500 registered voters.
A five-year sunset was put on the revenue stream, if the tax is approved. Two public hearings also have to be held before the council passes an ordinance allowing the Aspen Chamber Resort Chamber Association (ACRA) to pursue the LMD. Council members could change their minds if public sentiment indicates a citywide vote should take place.
ACRA officials submitted the names of 60 percent of the commercial property owners located within the proposed LMD on a petition asking the City Council to put the tax on the November ballot.
The new tax would be in addition to the already established 0.5 percent lodging tax.
Marketing officials said they think their chances of getting the tax passed are greater with a smaller pool of voters than the entire electorate.
The 0.5 percent lodging tax only won by a margin of 80 votes when it passed a citywide vote in 2000, and other bed taxes have failed at the polls over the years.
But Mayor Mick Ireland said not asking the full electorate sets a precedent for other taxes to be renewed or introduced. He added that a citywide vote also is appropriate because spending more money for marketing also could lead to a major policy shift by the city in bringing the resort back to a tourism economy, rather than being driven by construction and real estate, as it is now.
“The whole community should be able to weigh in,” Ireland said. “If we do this, everyone ought to have a voice in it.”
Councilman Steve Skadron agreed an LMD should be a broader-based community decision.
By putting a five-year sunset on the tax instead of 10 years as initially considered, the other three council members – Torre, Derek Johnson and Dwayne Romero – are behind a district-limited vote.
“It’s almost an experiment,” Romero said.
The council can repeal the tax through public hearings and an ordinance if the process is initiated by an individual who lives within the LMD.
The current 0.5 percent lodging tax, dedicated to summer marketing, raises about $600,000 annually. Unlike winter marketing that is primarily funded by the Aspen Skiing Co., there is no significant resource established to market the summer other than the existing lodging tax, chamber officials said.
In addition to the $600,000 budget, ACRA representatives have found themselves in recent years asking the council for more money, which comes out of the city’s general fund. This year, an additional $200,000 was given to augment this summer’s marketing campaign in response to the recession.
Aspen falls well below other ski resorts in dedicated marketing dollars – Snowmass Village spends $4 million a year on marketing.
By state law, there would be a district board to oversee the use of the funds generated by the LMD. That group would be required to present a marketing plan and budget each year to the public and council.
The first public hearing on the proposed LMD is scheduled for July 13 at City Hall.
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