DENVER—At least seven Colorado counties are asking voters to double, and even triple, lodging taxes at the ballot this November, with proponents claiming the jump in rates is needed to help compensate for declining revenues, and negative impacts of tourism.
Commissioners in Chaffee, Custer, Eagle, Gilpin, Routt, Ouray, and Park counties are all looking to cash in on the higher taxes, which apply to short-term (30-days or less) accommodations such as hotels, motels and short-term rentals, such as Airbnb.
Lodging tax revenue traditionally funds tourism marketing, but also gets poured into things such as roads, police, fire and emergency services. The legislature in 2022 expanded use of lodging tax revenue to include childcare and housing, requiring 10% to be used for tourism promotion.
Lawmakers went a step further earlier this year with House Bill 1247, increasing the maximum lodging tax rate allowed from 2% to 6%, and allowing the money to be used for infrastructure and public safety, thus unleashing the torrent of tax hikes on local ballots.
Don Sheehan, a Centennial city councilmember and mayoral candidate, voted against referring a lodging tax to city voters in 2022, and then went on to help defeat the measure at the ballot.
“The sales pitch is ‘hey it’s not going to hit you, it’s going to hit somebody you don’t know’,” Sheehan told Complete Colorado. “I think that’s kind of the motivation, it’s an easy way to attempt to raise revenue.”
While lodging taxes might be a convenient way to raise revenue without asking residents to dip into their own pockets, Sheehan notes that such tax hikes could backfire, and urges voters to think through all the potential implications before marking their ballots.
“I wonder if there will be an impact on tourism if it becomes more expensive,” Sheehan said. “You may actually be hurting your overall tourist volume if its more expensive for tourists to come out and stay here.”
Nash Herman, fiscal policy analyst at Independence Institute, a free market think tank (and publisher of Complete Colorado) agrees, noting these taxes may come with good intentions, but poor outcomes.
“These counties are basically trying to account for the adverse effects of over-taxation and over-regulation with even more taxation,” said Herman. “Counties are essentially looking to subsidize services that should already be covered by local property taxes. Voters should first ask that their property taxes be spent more effectively before accepting a new tax.”
The ballot measures
Chaffee County Ballot Issue 1A asks voters to triple the lodging tax from 2% to 6%, raising an estimated $3.5 million annually for roads and public safety. The tax hike includes the towns of Buena Vista, Pancha Springs, and Salida.
Custer County Ballot Issue 1A also asks to raise the tax to 6% for subsidized housing and early childcare. The tax is projected to generate $170,000 annually.
Gilpin County Ballot Issue 1A triples the county’s lodging tax to 6%. The estimated $340,000 in new annual revenue would go toward roads and childcare.
Eagle County Ballot Issue 1A asks voters to increase the lodging tax to 4% in unincorporated areas of the county. The tax could generate $4.5 million a year for tourism marketing, childcare, infrastructure and police/fire services.
Routt County Ballot Issue 1B asks for an increase to 6% for roads and public safety, potentially generating $821,000 annually. It will not include Steamboat Springs, which already has a lodging tax rate of 12%.
Park County Ballot Issue 1A asks voters to triple the tax to 6%, projected to raise $1.8 million for roads, police and emergency services and tourism. The tax excludes Fairplay and Alma.
Ouray County Ballot issue 1A asks voters to implement the county’s first ever lodging tax starting at 6%, projected to raise $182,000 annually. Excluding Ouray and Ridgway, proponents claim the need for the tax is “urgent” due to development pressures and tourism driving up the housing market.
As previously reported by Complete Colorado, at least two Colorado municipalities, Basalt, located in the Roaring Fork Valley, and Rifle, located in Garfield County on the Western Slope, are also asking for lodging tax hikes in November.
Ballots for the Nov. 4 election will start being mailed out to voters on October 10.

