Durango residents approved ballot measure 1-A, a lodgers tax increase, by a narrow margin during the Durango election Tuesday, according to unofficial results.
The ballot measure increases the city’s lodgers tax, paid by commercial lodging guests, from 2% to 5.25%. Overall, Durangoans favored the increase: 2,563 to 2,404, or 51.6% of the vote.
The results were announced about 8:35 p.m. during a regularly scheduled City Council meeting.
“We’re pretty excited,” said Jasper Welch with the pro-1A Tax Locals Don’t Pay committee. “We’re appreciative to the voters of Durango for supporting the increase in the lodgers tax. We had a great committee and a great campaign.”
About 25 people gathered with committee members Tuesday at El Moro Tavern, waiting “on pins and needles” for the results, Welch said. They celebrated the win with cheers and a bottle of champagne, he said.
More than half, 55%, of the tax’s revenue will support sustainable tourism marketing, while 20% will fund city transit and 14% will go to arts and cultural organizations, facilities and events.
Each year, Durango City Council will allocate the remaining 11% for any of the above uses, or tourism impacts, depending on the city’s needs at the time.
This is the first time in 40 years that a proposal to increase the lodgers tax has been approved by City Council and placed on the ballot.
Community groups have attributed that success, in part, to their unified support for the rate increase and revenue allocation.
Supporters include community organizations, like the Durango Area Hospitality and Lodging Association, representing the hotels that would pay the tax; Visit Durango, which could receive revenue for tourism marketing; and the Durango Creative District, representing arts and cultural organizations that could benefit from its revenue.
About 24 arts, lodging and restaurant businesses also endorsed the ballot measure. Representatives from those groups were among the largest funders for the Tax Locals Don’t Pay committee, which advocated in favor of the increase.
During the campaign, supporters emphasized the tax is paid by guests – not locals. They argued the tourism industry adds jobs for Durangoans and tourism marketing is essential. Funding nonprofits would also increase the quality of life for residents, they said, according to voter statements submitted to the city of Durango.
Opponents of the ballot measure did not agree with the revenue allocation, saying the city should fund its core services first. They also opposed increasing the number of tourists visiting Durango, according to voter statements.
“Obviously, we have some work to do. Some people were not convinced,” Welch said. “Tourism management is something that we need to focus on, for how to manage our resources ... to make sure Durango stays the special place it is today.”
City councilors might choose to divvy up funds right after the election – with distributions in 2021 – or allocate the money as part of the 2022 budget, said Dirk Nelson, Durango city attorney.
Of note, the ballot measure allocates money for specific uses – not specific organizations, Nelson said. City Council would have to create new contracts with any organizations receiving lodgers tax money.
“We have an excited group down here. Between the business community, arts and culture, and to be able to help with transit, I think it was a win-win for the community,” Welch said.