Colorado scrambling for tourists
The concept is to take a portion of what Colorado businesses keep in sales tax and steer approximately $20 million to $25 million annually toward the state’s lagging efforts to promote tourism, says the bill’s sponsor, state Rep. Al White, R-Winter Park.
“I certainly think it would be an investment with a quick return,” says White, who represented Eagle County until his district was redrawn last year. “Even a guy that sells tires in Greeley would see an increase in his revenue that would be larger than the amount of his contribution.”
White’s bill, which was approved by a House finance panel Wednesday, calls for a reduction of the “vendor fee,” which is the amount of sales tax retailers keep in exchange for collecting the tax. White wants to reduce the amount from 3 1/3 percent to 2 percent.
According to the Associated Press, retailers selling $1 million in goods per year collect $29,000 in state sales taxes. Under current law, they keep $957 for calculating the taxes. Under White’s bill, they would keep $580.
But the ensuing spike in tourism business would more than make up for the loss, White says.
“Every retailer will benefit to a larger degree than what they pay,” White says.
The bill has support from many elected officials in the High Country, including from the man who now represents Eagle County in the House, Rep. Carl Miller, D-Leadville.
“I think it’s something we have to do,” Miller says. “I’m certainly in full support of Al’s bill.”
Sen. Joan Fitz-Gerald, a Golden Democrat who represents Summit County, says she also back’s White’s bill.
“I’d rather take money from business for the purpose of generating business,” she has said, also referring to Gov. Bill Owens plan to take $10 million from an unemployment insurance fund and put it toward tourism promotion.
Owens’ plan, which he first announced as part of a $19 million economic stimulus package in his recent “State of the State” address, was rejected this week by the Legislature’s Joint Budget Committee. White says that same committee is likely to kill his sales-tax plan.
“I expect my bill to die in appropriations when it gets there,” he says. “The Joint Budget Committee is looking for same money to balance budget.”
An estimated $850 million will have to be cut from budget for the fiscal year that begins July 1. White says the money will be a lot more useful promoting tourism than balancing the budget.
In that last 10 years, he adds, Colorado has lost one-third of its share of the national travel market, which means $2.3 billion that should be spent in Colorado is being spent elsewhere. Towns, cities, counties and the state, all now struggling with slumping finances, would benefit from his bill, White says.
“The benefits are significant statewide and the first entities to benefit would be retail outfits,” White says. “That’s where the first dollars get spent.”
White’s plan has support from merchants throughout the state, though some have complained his proposal amounts to an additional tax.
“We’re sitting here and arguing about whether we’re going to lose $300 when we’re losing hundreds of millions in revenue that could otherwise be coming to the state,” Winter Park accountant and liquor store owner Michael LaPorte told the Associated Press. “This isn’t going to break or bankrupt anybody.”
Currently, $5.7 million is spent marketing Colorado – a figure among the lowest in the nation. Hawaii, for example, spends approximately $60 million.
Tourism promotion was funded by a sales tax until 10 years ago, when that scheme was halted by voters. Tourism employs more than 200,000 Colorado workers and last year, visitors who stayed at least one night spent $7 billion in Colorado.
White says his plan would help Colorado recapture is previous share of the travel market in less than two years.
“Marketing created our share of the market,” he says. “Our product is the same – that’s our beautiful state and all of the cultural and outdoor activities. If we aggressively pursue the market in the next 12 to 18 months, we’ll see a significant increase.”
Despite White’s pessimism about the date of his bill, Miller says he’s certain the Legislature will come up with substantial funds to promote tourism.
“I feel confident that we will get some funding for tourism this year, even with the budget cuts,” Miller says. “I believe funding tourism is a revenue generator with a very short return and that’s what we need in this state. We need to start generating sales tax and income tax and Al’s bill is one of the quickest ways we can do it.”
Summit Daily News reporter Jane Stebbins and the Associated Press contributed to this report.