Colorado counties consider new sources of revenue — including taxing recreation businesses — to make up for funding gaps
Chris Dillmann/Vail Daily
Editor’s note: This story has been updated to correct the spelling of Kelly Flenniken’s name.
Colorado counties could ask voters to allow them to tax industries in unincorporated areas, including ski resorts, lodging properties, manufacturers, and delivery businesses, under a bill to be introduced during the next lawmaking session.
The bill, which is still being drafted, is intended to help counties pay for roads, law enforcement and affordable housing. Counties would be required to specify to voters which services the new sales or excise taxes would fund.
“Our service delivery needs have increased, and our funding has decreased,” said Kelly Flenniken, executive director of Colorado Counties Incorporated, which is pursuing the bill.
Flenniken points to growing inflation and the legislature blunting county revenues from property tax increases as reasons for the squeeze on services.
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The idea was one of the most popular among members of Colorado Counties Incorporated, an advocacy organization representing all 64 of the state’s county governments.
The concept began with Clear Creek County Commissioner George Marlin, who noticed that one of the most lucrative industries in his community — rafting — requires some of the most frequent calls for county emergency services.
“They are paying a 0% tax rate on their transactions,” he said. “Sales tax can be kind of low in the unincorporated area, but service demand and service expectations are going up. There’s a need for wildfire mitigation, and there are a lot of roads in the unincorporated areas.”
Tamara Pogue, a Summit County commissioner, also helped bring the idea to Colorado Counties Incorporated.
“If you’re at a ski resort in a municipality, you’re paying some sort of sales tax to support the impact you’re having as a tourist. But if you’re a tourist going into an unincorporated area, that authority doesn’t exist,” Pogue said.
Some ski towns with resorts, like Breckenridge and Vail, already charge a tax on lift ticket sales. But areas like Copper Mountain, Beaver Creek and Arapahoe Basin aren’t located in municipalities. The bill would give counties the same taxing authority as home-rule municipalities.
Summit County doesn’t have specific plans for tax proposals if the bill were approved, Pogue said.
Under the bill concept, counties could also ask voters to let them tax a manufacturer in their community to help pay for health services, for instance.
While the idea originated around recreation, it quickly evolved to include any industry. The taxing authority could extend to delivery services, manufacturing and other businesses as well. The bill won’t mention any specific industries, Flenniken said.
“We left it almost intentionally vague because we are very confident of the differences from county to county,” Flenniken said.
The bill will be sponsored by Sen. Dylan Roberts, D-Frisco, and House Speaker Julie McCluskie, D-Dillon, Flenniken said.
The bill comes as part of a package of bills Colorado Counties Inc. is pursuing after the legislature cut the growth in property taxes twice this year. A bill passed in the regular session cut property tax growth statewide by $1.3 billion. Another bill passed during a special legislative session in August decreased them by another $254 million.
Colorado Counties Inc. is also supporting a bill that would increase the cap of county-imposed taxes on lodging properties, including short-term rentals, to 6% from 2%. Summit, Grand and Eagle counties are among those with lodging taxes.
The next lawmaking session begins in January.
