Craig discusses tax on lodging
March 25, 2010
Craig City Council member Terry Carwile raised the idea Tuesday night of possibly implementing a citywide lodging tax in Craig during the council's meeting.
The idea was met with general agreement by other council members, who felt the potential tax, which is imposed on people staying in hotels, motels and other forms of lodging, would warrant a discussion in a public workshop.
The council agreed to host a public workshop, but City Manager Jim Ferree said Wednesday that a meeting date has not been determined.
Currently, Moffat County imposes a 1.9 percent tax on lodging, which funds the Moffat County Tourism Association. The county's lodging tax was approved in 1987 and took effect in 1989.
Carwile said his reasons for suggesting the city tax stem from several factors.
Sales tax revenue has been declining and energy impact grant money has dried up recently, he said. Carwile contends implementing a city lodging tax, a portion of which could be used to expand tourism, would reinvest back into Craig.
He hopes that reinvestment eventually would boost tourism, sales tax numbers and the local economy as a result.
"Most all of that lodging tax gets generated within the (city's) boundary and yet we are constrained by the statutory elements of the county's tax," he said.
Carwile said he felt tourism promotion generated by the tax is important to the region.
"It would be imperative for us, in my mind, to maintain and even enhance that tourism promotion effort," he said. "Moffat County has so much to offer in the way of outdoor recreation."
The current lodging tax collected by the county is limited to no more than 2 percent.
In 2009, Moffat County collected $155,260.51, all of which was distributed to MCTA.
A city lodging tax would not have to adhere to the county's 2-percent collection, and would not be required to fund tourism.
If the city were to implement a lodging tax, the county would have to withdrawal its collection of taxes within city limits, a move Moffat County Budget Analyst Tinneal Gerber said could severely reduce MCTA's funding.
Carwile said, however, that he would be in favor of working with the county to maximize lodging tax money.
Any implementation of a new lodging tax in the city would have to be approved by Craig voters, however.
A citywide lodging tax could potentially be used for various other funds, including the general fund, Ferree said.
"(The tax) is something that a lot of cities and towns do in Colorado," he said. "Because there is not the statutory limitations, there is a little more flexibility in terms of the amount that can be earned and the items the funds can be spent for."
Ferree said Craig has never had a lodging tax and did not speculate on the future of MCTA.
Moffat County Commissioner Audrey Danner said the discussion was "not a surprise," to her.
"This is an appropriate discussion for the city and the county to talk about and I am very willing to have that discussion," she said.
Danner said the process was not as much a concern as the end result.
"We should talk about how we best secure tourism dollars for our community and spend them appropriately," she said.