The 1% tax in Estes Park that goes to the voters on April 1 is being touted as allowing the tourists to pay for things the town needs. In other words, stick it to the tourists and let the residents benefit from the influx of tax dollars.
Is that really what will happen, though? What about residents who shop locally? Yes, they would pay the additional sales tax as well. Jobs? Hardest hit will be the service industry, some of the lowest paid workers in the community. The town already has problems attracting teachers and other employees who live in Estes Park. How will another tax help that problem?
Town Administrator Frank Lancaster says the tax won’t hit those lower paid workers because the 1% is negligible. It’s only a penny on every dollar spent. In fact, Estes Park already has a 4% tax on food, something Mr. Lancaster may not know because he comes from the valley, where there is generally no tax on food. This would raise grocery bills another percent: to 5%, or 5 cents on every dollar.
On the tourist end of the spectrum, there is a pillow tax of 2%, which is on each hotel bed in Estes Park. The increased sales tax will bring the amount of tax paid by tourists to 10% if they stay in Estes Park overnight.
The tax revenue from the new sales tax is supposed to cover 2/3 of the cost to improve local roads. This means tourists are paying for roads used mainly by residents. Not exactly a good marketing ploy.
The 1% sales tax increase would raise $2 million in revenue and share the cost with visitors. Great for the locals, not so great for tourism. How many tourists actually research the tax rate before arriving in Estes? Probably not many, however, if they notice a high tax bill when they check out, they may not come back.
Questions about the tax:
- If another 1% is added, will tourists realize they are being charged to help make up for shortfalls in Estes Park?
- Will tourists realize it’s cheaper to stay in the valley (instead of Estes Park) and just make a day trip up?
- If tourists stay in the valley and just venture into Estes Park for the day, where will they eat breakfast and dinner? Probably where they are staying, not where they are playing.
- Will locals continue to shop in Estes Park?
When taxes are increased, there is always a whiplash effect. It may not be felt immediately, but when government wants to increases taxes, they don’t look at, or acknowledge, the ripple effect.
The good (or so they say):
- If the sales tax increase passes, the town will not have to cut services for police, streets, building and planning, utilities, etc. However, those arguments are typically used as scare tactics, when other cuts could be made that do not affect local resident’s safety.
- The tax is only in effect to 10 years. If the town gets the tax increase passed on April 1, 2014, do you think they will be able to give up that source on their budget line in 2024, or will voters be asked to renew and perhaps even increase, the tax rate yet again? Will local government use that money wisely, or borrow against it, as they are doing with the $6 million for the Multipurpose Center at the Fairgrounds?
- It’s only 1%...however, calculate that on top of every other tax residents of Estes Park, Colorado and the United States already pay. How much is too much tax when your hard earned money is being taken from multiple sources? The Town of Estes Park takes a sales tax of 7%, the state of Colorado takes an income tax of 4.63%, and the United States government takes up to 39.6%. You also pay taxes on gas, “sin” items (alcohol and tobacco), utilities, payroll, and air transport.
Ask questions before voting to increase a tax.
- Has the Town of Estes Park provided necessary comprehensive road needs assessment, planning documents, timing, scheduling, etc. to justify the increase they are asking for?
- Have voters forgotten they passed a measure in 2000 which already adds an estimated $2 million annually to the Community Reinvestment Fund (a good percentage of which is earmarked for road maintenance and repair)? And just where did that money go if not for roads?
- How much have salaries and benefits increased in the local government of Estes Park since 2012? Try $1.5 million. Where does that money come from and will this tax pay for something the Town has committed to instead of what residents said the town needs?
- Part of the tax increase is already earmarked to fund a Recreation/Senior Center, yet plans and a feasibility study do not even exist yet. What happens to that earmarked money if the tax passes and it is not feasible to build a Recreation/Senior Center?
There are glossy brochures all over Estes Park, put out by the Town of Estes Park, who has the most to gain from a tax increase. Do your research and decide for yourself if this tax increase is best for the Town.
Another item on the April 1, 2014 ballot is the sale of Lot 4, which would bring in an immediate $1.35 million. If that money is added to the town coffers, is the 1% tax increase really necessary, or is the town just being greedy because they don’t want to make serious cuts to the budget?
Part 1 of 2 of the sales tax increase is available here. If you appreciate this article, please share it with Estes Park residents, and click subscribe at the top of the page.