New Lodging Tax Bill HB22-1117 to Support Housing Efforts

April 5, 2022

Gov. Jared Polis says enough is enough on tourism marketing

New bill says lodging tax no longer needs to go 100% toward advertising Colorado

This story is from Nate Peterson contributed to this report.

John LaConte
Vail Daily

Colorado Gov. Jared Polis speaks about House Bill 22-1117 on Thursday, March 31, at Miller Ranch in Edwards. The bill allows county lodging taxes to be used to help create affordable housing funds in Colorado.
Chris Dillmann/Vail Daily

Hotel guests in Colorado will no longer see 100% of the funds they pay into county lodging taxes used for marketing efforts telling them to return, thanks to a bill signed into law Thursday, March 31, in Edwards.

Those marketing efforts aren’t as necessary if the tourism industry is facing larger problems serving the guests who are already here, Gov. Jared Polis said in a speech explaining why he feels the new bill is important.

“If the tourism community, and the industry, needs housing because they need workers to be able to power the tourism industry, that should be an allowable use of funds, too,” Polis said.

Polis credited Rep. Dylan Roberts, a Democrat who lives in Avon, for his work on the bill, saying Eagle County, is an example of a place where lodging tax funds would be better spent on housing than marketing.

“That’s exactly the situation we have in Eagle County,” Polis said. “Our recreation economy, our tourism economy, depends on housing.”

The new bill says 90% of the lodging tax funds can be used outside of tourism marketing, allowing counties to make capital expenditures out of their lodging tax coffers for housing and child care, or for facilitating and enhancing visitor experiences, which include trail maintenance.

A plus for public housing

In an effort to visit the types of projects that could benefit from the bill, Polis toured Miller Ranch in Edwards and the town-owned property in Vail known as the Residences at Main Vail, which is being converted from a preschool to a mix of 72 one- and two-bedroom apartments.

“Communities are healthiest when people who work in communities are also able to live in communities,” Polis said. “It also reduces traffic, takes cars off our roads, leads to cleaner air, and if people can live close to where they work, it also improves employee morale and retention.”

But that doesn’t mean downvalley housing isn’t important, as well. In the complicated layout of Eagle County, where numerous towns comprise a single workforce, Polis said the answer has to be “yes” to many of the questions on housing.

“It’s ‘yes’ to transit-oriented development downvalley,” he said. “And it’s ‘yes’ to additional apartments … close to the town, as well.”

Colorado Gov. Jared Polis tours the new site at Residences at Main Vail on Thursday, March 31, in Vail.
Chris Dillmann/Vail Daily

Serendipitous timing

In examining the history of Colorado counties’ ability to lobby lodging taxes, Roberts said it might have made more sense in the 1980s to stipulate that those lodging taxes be used strictly for the purposes of advertising and marketing local tourism.

“That was back in a time when Colorado wasn’t as much of a tourism hot spot as it is today, and I think it was seen as a way to try to promote Colorado and generating resources to do that,” Roberts said. “But now, we live in a totally different world here in our mountain communities, where people are coming here in droves regardless of what sort of marketing is done elsewhere, and we’re feeling the consequences of it, with our housing crisis, with the cost of living being so high for people who want to live and work here.”

As Roberts was presenting the bill to the state Legislature in January, crowded ski areas were receiving media attention across the country, with pictures of long lift lines and crowded roads and parking lots being shared in traditional and social media.

“It was pretty serendipitous timing,” Roberts said. “There was a lot of press across the state and the country about some of the impacts of sky-high visitors at any Vail resort across the country.”

Roberts said he referenced those current events in his presentation of the bill.

“At first, the hotel lobbying association and the statewide tourism groups were hesitant about this bill,” Roberts said. “But I was able to point to the fact that this was happening right now as we’re sitting here, my community and other communities across the state are grappling with the significant impacts of increased visitation in our communities.”

In addition to receiving support from the tourism industry, Roberts said the bill received bipartisan support in the Legislature.

“We made compromises and got the bill to a place where nobody was opposed to this,” Roberts said. “This was a bipartisan bill from the very start.”

‘Year after year funding’

In Eagle and Summit counties, there is no county lodging tax. Roberts said officials in those counties were not likely to ask voters for one, either, given the fact that funds would have needed to be used for tourism marketing.

Local county commissioners “don’t see it as a useful thing to ask voters for,” Roberts said. With the signing of House Bill 22-1117 on Thursday, “Now they can go to their voters and ask for a lodging tax to generate funding for housing.”

Roberts said that idea brings some hope when it comes to the housing crisis resort communities are facing.

“We have a lot of one-time funds for housing, or we do one project, but this could be year after year funding for housing and workforce development,” he said.