Pagosa voters approve increase in lodgers’ tax

“The Town is hoping to work with the state to have them collect the tax and work with the lodgers to advise them of the increased tax rate. Currently sales and lodgers’ taxes are collected by the state on a quarterly basis and sent to the county and from the county to the town and the chamber.” Mark Garcia, Town Manager

PAGOSA SPRINGS — On Nov. 1, voters in Pagosa Springs approved a 3 percent increase in the lodgers’ tax. The new tax will take effect Jan. 1, 2006, and will increase the lodgers’ tax from 1.9 percent to 4.9 percent. A total of 370 town residents voted in the election and approved the measure 224 or 60.5 percent in favor, 146 or 39.5 percent opposed. It is estimated that the new tax will increase tax revenue by $294,110.

Revenues derived from the lodgers’ tax will be used for tourism and tourism-related marketing and capital improvements; special events sponsored, funded or assisted by the town; and other tourism uses determined reasonable and necessary by the Town Council. According to Ordinance 647, the Town Council will appoint a Tourism Committee to make recommendations regarding the use of revenues generated by the lodgers’ tax. This 13 member committee will be made up of representatives from the Lodging Association, the Chamber of Commerce, the Realtors’ Association, the Builders’ Association, the Community Vision Council, the Restaurant Association, the Merchants’ Association and two at large members nominated by the Chamber of Commerce.

Town Manager Mark Garcia said the town is hoping to work with the state to have them collect the tax and work with the lodgers to advise them of the increased tax rate. Currently, sales and lodgers’ taxes are collected by the state on a quarterly basis and sent to the county and from the county to the town and the chamber.

“It arrives in chunks,” Chamber Director Mary Jo Coulehan said. “We don’t know when it will come in.”

The new tax will be collected beginning Jan. 1, but the lodging businesses won’t pay those taxes until the month after the end of the first quarter, or April. The first tax revenue checks will not arrive until May.

“So, we haven’t spent it yet,” Coulehan said. “We really don’t know how much money we will collect and we have to be fiscally responsible.”

But Coulehan has some idea of how the Chamber of Commerce will spend the money. For the past year, the chamber has been working with Hill and Company to develop a new marketing strategy. The marketing committee has implemented the first phase of the plan, which included high impact, low cost options. With the extra money from the new lodgers’ tax, they hope to start implementing some of the high impact, high dollar necessities, like a new Web site that is bigger and better for local businesses and easier for the community and visitors to access, and a professionally printed visitors guide. Coulehan also envisions that the chamber might utilize the additional funds for research and development, to help pay for a complete branding program that Hill and Company has devised for the community.

“It will cost us $10,000 to do the brand marketing we need to do,” Coulehan said.

Pagosa Springs is solely dependent upon tourism and sales tax to provide revenue. The current chamber budget limits the amount of money the chamber can spend on advertising and trade shows. And while the chamber does know which states Pagosa area visitors come from, they don’t know which cities or ZIP codes are most prevalent. Coulehan is working with students from Fort Lewis College to provide her with analysis of visitor information from Wolf Creek ski area, the Four Corners Folk Festival and toll free calls and e-mails. Coulehan would like to branch out and attend different niche trade shows that are targeted to the health and holistic healing markets and the incentive marketing programs.

There is also interest in developing a walking tour of the town and there is some interest in hiring an events coordinator. But Coulehan believes it is important for the town to develop its core infrastructure and get it in place before they can host larger events.

“I’m still new to this job and my brain can’t stop,” Coulehan said. “I want to go so far so fast, but I can’t.”

Last year, the town collected about $186,000 in lodgers’ tax and visitor numbers are up from 2004. Interest in relocation packets requested from the chamber has already doubled the number of requests for all of 2004.

As for what town staff envision spending the new tax on, Garcia said that he will “essentially leave it to the committee to come back with recommendations.” He envisions that the funds will pay for a combination of what the chamber is doing and the additional recommendations of the Tourism Committee.

The town will make requests to the stakeholder groups listed in the ordinance to provide representation on the committee.

“My goal is to have them in place sooner rather than later,” Garcia said. “I’d like to have the committee established by early February.”