Cripple Creek Mulling Plans Again for a Lodging Tax By Beth Dodd

lodging-tax

The city of Cripple Creek may once again try to generate extra money through a proposed lodging tax.

But how the additional funds would be used is still up in the air. Also, history is not on the side of Cripple Creek leaders as similar lodging levy attempts in the gaming town have been firmly rejected.

At a work session preceding the regular city council meeting on April 20, the Cripple Creek City Council discussed the possibility of a lodging tax initiative. If the council decides to act, voters could decide the fate of this issue on the next election ballot this fall.

If a lodging tax is to be considered in November, then the language for ballot proposal is due by July, so a decision has to be made soon. The idea has been defeated by Cripple Creek voters twice before. However, some community members think this could be a great way to generate new revenue without taxing local residents.

In this latest rendition of a lodging tax ballot issue, complimentary rooms would be excluded from the tax. The tax would be a fixed percentage somewhere between 3 and 7 percent of the gross room fee. Very rough estimates of how much money the tax could generate for the city exceed $300,000 per year. At this time there is no plan for how the money would be used. If it is not specified when the ballot measure is written, then it would go into the general fund.

Lodging taxes are charged in many other communities, including Black Hawk and Central City, where they are an important source of income. You probably paid a lodging tax the last time you visited a resort. Lodging taxes are popular because they are paid by visitors rather than locals and can help offset things like wear and tear on the roads. On the downside, lodging taxes raise the price that hotels must charge for their rooms, which some claim is an unfair burden on the lodging owners.

“There is nothing sneaky about this. It is a common way to raise revenue,” said Cripple Creek City Administrator Ray DuBois. “Sales tax funding is much less here than in other cities.”

Questions were asked at the city council work session about the collection of the tax. The money would be paid to the city, not the state. There was also a question about whether casino rooms would be subject to the tax the same as private owners. If a lodging tax is put on the next ballot, a citizen group would be needed to support and promote it, as the city council is restricted from directly promoting ballot issues.

Representatives from Cripple Creek’s casinos say they are not in favor of a lodging tax because they do not want room prices to increase and discourage visitors from staying over night. However, if the tax were to become a reality they would like to see all of the revenue from it spent on marketing.

While a vote was not taken on April 20 on whether to prepare a lodging tax ballot issue, the consensus at the end of the work session was to continue moving toward that goal. After a short break at the end of the work session, the city council held its regular meeting.

Sales Tax Exemptions and Signs

Tim Braun requested a sales tax exemption for school fundraisers. The state of Colorado exempted school fundraisers from state taxes back in 2008, but officially the city could still require the schools to collect and pay sales taxes. The city has never actually done this, so Braun’s request was mainly to have the law come into compliance with local practice. After a short discussion, the council agreed and asked city attorney Lee Phillips to draft an ordinance for a vote at the next council meeting.

A request that was presented by Jeff Kurka to amend Chapter 18, Article 1 of Cripple Creek’s municipal building codes was voted on and passed. The version of the state building code being used locally was out of date and starting to cause confusion with contractors who are using newer codes in other communities.

Cripple Creek will now go mostly to 2012 codes. Some of the changes to the building codes include requiring water and waste pipes outside of buildings to be protected from freezing and to be installed 24 inches below the frost line and 36 inches below grade. There are also changes to the requirements for fire suppression sprinklers inside buildings.

A request for approval of a variance for a new sign at the Wildwood’s Gas N Roll gas station and convenience store was presented. Although the sign would be in the historic district overlay rather than in the actual historic district, the Wildwood has made an effort to blend the sign into the historic surroundings. The sign would include headframe-like elements and an ore cart.

However, the sign is also very large and would include backlit digital numbers for fuel prices as well as electronic message board. The city’s standard for a free standing sign is 16 square feet. The Gas N Roll sign is 53.5 square feet. Also, the sign height allowed is 8 feet, but the Gas N Roll sign would be 15 feet.

Concerns were raised about potential problems with light pollution from the proposed sign. Wildwood representatives agreed to possible modifications to the sign should it prove to be disturbing to nearby residents. The sign variance was voted on and approved by all of the council members except one. Tom Litherland cast the only no vote.

Finally, a discussion was held about the vacation of the alley behind the Palace Hotel (see related story). The alley needs to be rebuilt to make way for the restoration and expansion of the hotel by Century Casinos. In spite of objections to the design of the new alley raised by the neighbors at Community of Caring at the Aspen Mine Center, Triple Crown Casinos, and Cripple Creek Parks & Recreation, the plan received initial approval from the council. A final ordinance will be voted on at their next meeting.