Cripple Creek leaders may wager another gamble on local lodging tax

~ by Rick Langenberg ~

If a tax plan doesn’t succeed, try again, again, and then again.

That may become the motto of Cripple Creek elected leaders who may revisit the idea of a lodging tax to generate much needed revenue for operating the city.

This was one conclusion rendered by city officials during an economic outlook presentation held at last week’s regular council meeting.

The outlook basically was quite optimistic, with initial findings showcasing the gaming industry rebounding from a lengthy slump and demonstrating impressive gains over their gambling rivals up north, capped by steady hikes in betting activity; a healthy increase and forecast for local non-gaming attractions and tourist hubs, such as the heritage center, the jail museum and the Butte Theater; an aggressive push for grants with $3 million-plus in projects for2017 and future years for road improvement and park enhancement projects; and a definite increase in families visiting the area and more interest from European travelers.

That’s the good side of the picture. “Things are going pretty well,” said Cripple Creek Finance Director Paul Harris, in discussing the overall economic trends. “We have a good outlook,” added Special Events and Marketing Director Steve Kitzman.

The bad side is that Cripple Creek is reeling from a record low amount of gaming device fees, the main financial tool for financing the city government. The first two quarters of 2017 for Cripple Creek have featured a game and device count that shattered previous records for the low column.

The end result is that the city has seen a nearly $2 million decline in annual revenue. The fees gaming operators paid the city for their betting devices are substantial and mark the main funding mechanism for the city. “It’s a big hit to replace,” said Harris, who cited about 3,600 betting devices and games at the beginning of the second quarter. During the town’s peak in 2008, it bustled with close to 6,000 betting options.  

Currently, the town only has six gaming operators and it has a casino lineup that has reached a saturation point as far as total gaming devices.

The city has made up the difference by striking a record jackpot in grants. But grant funding can only last for so long, according to city critics. Regardless, some of these projects will result in major road, sidewalk and trail improvements on Teller One, a new outdoor adventure park and a new water treatment facility, just to name a few major enhancements.    

Still, some question the city’s logic in not pursuing other alternative funding choices.

In late winter 2017, the city council opted not to consider adding recreational marijuana shops to their mix, citing a lack of support from local residents and questioning the probable financial benefits. A final hearing on the matter generated much opposition from school district proponents.

The council retreated from putting the issue to a vote of the citizens and basically decided to keep the current prohibitions against medical and recreational marijuana and grow centers in place.  

But that decision may come to haunt the city from a revenue perspective, considering the current financial analysis of the business community. 

The end result is that the city must find ways to generate mucho bucks, or consider cutting or eliminating major programs.

Last week, the idea of possibly re-triggering the proposed lodging tax campaign was mentioned. However, officials declined to elaborate on details. Other options included efforts to revitalize an economic development council and hire a new planning director. These are strategies the town relied on in the past, with limited success.   

 However, officials say the economic cards have changed for the community. Kitzman cited the entire Pikes Peak region as a big winner regarding tourism projections and a lodging boom. “We have an  extreme demand for hotels up here,” said the marketing chief.

That demand will only increase, as one of the town’s signature hotel expansion bids, the renovation of the Palace Hotel proposed by Century Casinos, has hit a snag and will remain on hold or at least a year, according to Kitzman. But other casino players, such as Bronco Billy’s and the Triple Crown Casinos, may offer their own lodging expansions.   

 Kitzman last week mentioned the possibility of revisiting the failed lodging tax campaign of 2016. According to some lodging tax proponents, this time campaign organizers plan to demand that extra money generated will go towards marketing and special events. City officials and elected leaders believe that last year’s effort suffered from a lack of education.

But lodging tax plans in Cripple Creek haven’t fared very well. Voters and elected leaders have said no on several occasions. Previous plans have collided with the bids of the casino industry and operators of small Mom and Pop lodging and bed and breakfast operations.