Labor Day weekend signals the end of summer — and it means more than just the kids going back to school and cooler temperatures.
For many Pikes Peak region businesses, it marks the end of their busiest season. Restaurants might see fewer people; the North Pole is looking forward to visits from school groups instead of tourist families.
By all accounts, it’s been a pretty good summer. While final visitor counts won’t be available for a few months, the Springs tourism business has bounced back from the Great Recession and back-to-back wildfires to reach record numbers of visitors and tourism dollars spent in Colorado Springs.
More visitors mean more money in the city’s coffers. Despite having one of the nation’s lowest rates for our local Lodgers and Automobile Rental Tax, the city and the Colorado Springs Visitors and Convention Bureau still benefit from the influx of tourists every May through August — and now, even into the shoulder seasons.
Visitors mean more than just LART dollars — they also add to the city coffers through sales taxes, the major way Colorado Springs funds road and bridge improvements, as well as public safety efforts.
Let’s look at the numbers:
• Sales and use taxes combined are up 4.18 percent for July and up 9.62 percent above last year’s numbers.
• Sales taxes alone are up 2.58 percent for the month and 9.5 percent year-to-date.
• The 2 percent lodgers tax is up 15.98 percent from June to July and 19 percent higher than last summer’s revenue.
• The 1 percent auto rental tax is up 17.14 percent for the month and 8.07 percent for the year.
It’s all good news. But we could do more marketing and attract more tourists to the city’s businesses for events that include business opportunities — unlike the cycling race that cost downtown and Old Colorado City businesses an entire day of earnings — if we increase the LART charged by hotels and car rental companies.
Take a look at what other cities charge visitors. In Nashville, Tenn., the automobile tax alone is 13.25 percent. The city’s sales tax is 9.25 percent, higher than the Springs’ rate of 8.25 percent, and its hotel tax is 5 percent.
With that money, Nashville markets itself as Music City USA and draws 13.9 million tourists every year. Thanks to the draw from Pikes Peak, Garden of the Gods, the Cheyenne Mountain Zoo and a host of other attractions — the U.S. Olympic Museum soon to join them — Colorado Springs sees 15 million visitors a year.
Imagine if we doubled the LART — still lower than Nashville’s tax rate. The money could go to support arts and humanities in the Springs, could benefit the Downtown Partnership and the CVB. It could help develop the kind of music festivals that draw thousands — like Telluride’s bluegrass festival. We could provide some support to Cheyenne Mountain Zoo and the Fine Arts Center. We could create month-long events like Memphis in May, which celebrates business and tourism while creating a relationship with a foreign country — increasing export opportunities for Tennessee’s River City.
It doesn’t necessarily mean marketing for more outside visitors to fill roads and restaurants. Instead, an increased LART could improve events and festivals designed for locals. It could create a larger What If? Festival for kids, could support Science, Technology, Engineering and Math education at the Challenger Learning Center or the Space Foundation.
We could use LART dollars — not increased sales taxes — to improve parks, trails and open spaces throughout Colorado Springs.
The Springs always has been fiscally conservative. And that’s actually good for business. There’s nothing wrong with being cautious about the tax rate, always being aware that higher sales taxes can be a negative when recruiting and retaining businesses.
But the LART isn’t a tax on local residents — it’s a tax almost entirely on visitors, most of whom would come here anyway, attracted by the Rocky Mountains and amenities throughout Colorado Springs, El Paso County and all of Southern Colorado.
Charleston, S.C., is a port city with a population close to that of the Springs. It has about 5 million visitors a year, but again, its lodging and auto taxes are higher.
The hotel tax is 6 percent — and the state adds an additional $1 to every bill, which is “voluntary,” but there’s no record of anyone asking them to remove it from the bill. With fewer visitors, Charleston has far more money to market the city to tourists and locals.
As Doug Price, CEO of the CVB said while in Charleston earlier this year: “We’re punching way above our weight.”