The city of Manitou Springs has proposed new terms for a tax incentive agreement with the Cog Railway that city officials say would better protect Manitou from inflationary impacts over the agreement’s 50-year term.
Under the proposal, the city would waive use tax collection on reconstruction of the depot and railway, which need extensive repairs, according to the Cog.
During the first 25 years, the city would still rebate excise tax over a base level to the railway. In years 26-50, the Cog would pay a minimum of 3.8 percent on ticket sales. In any year in which sales exceeded 375,000 tickets, the Cog would pay sales tax at the full rate all businesses are charge. Manitou’s current rate is 5 percent.
The railway also would pay the city $500,000 this year, $500,000 in 2019 and $250,000 in 2020, to make up for revenue the city will lose while the Cog is closed for renovations.
The provisions regarding sales taxes in the last 25 years and the extra $250,000 payment to Manitou represent changes from the terms of the tax incentive agreement the Cog originally proposed and Manitou’s City Council approved on June 26.
Manitou Interim City Manager Malcolm Fleming told a community gathering Oct. 2 that, without an agreement, “we would have to cut $600,000 from this year’s budget” and that similar cuts would have to continue in future budgets.
Mayor Ken Jaray said the Cog is reviewing the proposal and that another community meeting on the issue will be scheduled for Oct. 9.