Four decades ago, long before Douglas Bruce and the Taxpayer’s Bill of Rights, the Colorado Springs City Council approved a 2 percent tax on hotel rooms and a 1 percent tax on car rentals. The proceeds of the Lodgers and Automobile Rental Tax were to be used to “attract visitors and enhance the economy of the city and the Pikes Peak region.”
In other words, it’s a municipal venture capital fund, with a mandate so broad that it’s hard to think of a project or event that wouldn’t qualify for funding.
The original push for the tax came from the local visitor industry, whose leaders believed that Colorado Springs couldn’t compete with rival visitor destinations without some form of recurrent public funding. Many of them had such taxes, with some percentage of the proceeds used to fund destination marketing organizations such as the Convention & Visitors Bureau.
Given the historic importance of the visitor industry and the fact that the tax was almost entirely visitor-funded, the proposal met with little resistance. Its structure and purpose haven’t changed much since it was first created — and neither have many of the funding recipients.
Approximately two-thirds of annual LART collections are transferred to the CVB under the terms of a contract with the city that is periodically renewed and updated. In 2015, the city entered into a three-year contract with the CVB, which will expire at the end of 2017.
The fund is overseen by city council. An appointed nine-member committee forwards funding recommendations to council. The 2018 recipients will be announced Aug. 22.
The LART committee includes local luminaries Kathleen Fox Collins, Jack Damioli, Laurel Prud’homme and Fred Veitch, as well as city councilors Tom Strand and Jill Gaebler. Broadmoor President/CEO Damioli may seem a little out of place here, but it makes sense when you consider that The Broadmoor’s guests are, by far, the largest contributors to the LART fund.
It’s interesting to compare the 2017 LART budget with 1997’s. Like 2017, 1997 was a prosperous year when the economy was strong and residents were cheerfully optimistic.
In 1997, LART collections amounted to $4.03 million, but $420,000 had to be refunded to the voters, thanks to TABOR. That left $3.6 million, with $2.2 million going to the CVB and $1.4 million to the city.
After the CVB, the Broadmoor World Arena was the biggest individual recipient, getting $500,000. Another $588,000 was transferred to the general fund for tourist-related expenses, including park maintenance and “public safety and other support services for various annual events.”
Substantial funding was directed to the Fine Arts Center ($78,000), the Summer Symphony ($108,000), the Pikes Peak Highway ($30,000) and the Cheyenne Mountain Zoo ($80,000).
Twenty years later, the fund brought in $5.5 million, with $3.7 million going to the CVB and $1.8 million distributed to dozens of tourism, community and legacy events.
Scooping up $250,000, the Colorado Classic one-day bike race was the biggest hog at the trough, followed by the promoters of golf’s 2018 Senior Open ($165,000), the Philharmonic’s summer symphony ($142,000), the Labor Day Liftoff hot air balloon event ($122,000), the Triple Crown Sports youth baseball event ($75,000) and the Fine Arts Center ($50,000). One substantial capital improvement project was funded — $250,000 for the proposed new Pikes Peak Summit Complex.
Is there some coherent investment philosophy behind this chaotic grab-bag? That’s not at all clear.
“Maintaining legacy events has always been part of it,” Gaebler said. “We’re a General Palmer kind of city. But council needs to develop its own measurements and guidelines and give formal direction to the LART Committee, rather than letting the committee decide on its own.”
Denver levies a 10.75 percent lodging tax and a 7.25 percent short-term auto rental tax, far higher than the 2 percent and 1 percent in Colorado Springs. Voters might consent to raise our rate, but backers should commission a review of present practices.
Also, let’s remember one thing: Our conservative voters don’t much like taxes — even ones they don’t have to pay.