Silverthorne Town Council got a sneak peek of potential ballot language for a proposed lodging tax increase the town will send to voters in the April 2022 municipal election.

Earlier in November, council agreed to put a 6% lodging tax on the ballot and saw a draft of ballot language at its Dec. 8 work session. Because Silverthorne doesn’t have property taxes, the Town Council decided to find a different way to increase revenue with increased demand on the town and its services. The lodging tax would be collected on any short-term (less than 30 day) rental in a hotel, motel or any residential property.

“We always try to look for ways for revenue diversification,” Silverthorne Mayor Ann-Mari Sandquist said. “It would be nice to have another stream of income that’s not sales tax.”

Sandquist said the town wanted to find a way to do this without necessarily impacting its residents, as the council knows they don’t want to pay increased taxes. Voters already shut down the idea of implementing a property tax in 2018.

Town Manager Ryan Hyland noted that Silverthorne is one of only about 10 municipalities in Colorado that doesn’t have property taxes, reiterating Sandquist’s point about the need for revenue diversity. He said the sales tax-based revenue philosophy has worked well for the town, but there’s only so much room left to grow.

“The vast majority of people like the model that we have,” Hyland said. “A lot of our visitors, a good portion of their spending is what drives the revenues and the budget here. However, we also all do see each other at Target, so our locals certainly pay sales tax.”

With new hotels opening throughout Silverthorne and conversations around short-term rentals impacting every town in the county, Silverthorne hasn’t seen as high of an impact from short-term rentals as other municipalities, but it is still seeing the impacts of increased visitor volume. The tax is intended to fund programs that have seen increased visitor impact, such as the Silverthorne Recreation Center, parks and trails.

Silverthorne’s current 2% lodging tax was approved in 1998 and contributes to marketing and capital improvements for recreation. With changing needs, the town wanted to increase the amount and broaden what it can be spent on.

“When we start looking at future opportunities, we do see hotel growth and a lot of tourism growth in the area,” Hyland said. “There’s an opportunity to have our visitors help a bit more in paying for the services and amenities that are in our community. And to be fair, with that increase in visitation, we do see impacts on public safety services and the recreation center and our transportation network and housing.”

In the proposed ballot language, revenue from the new 6% lodging tax could be spent on “any lawful municipal purpose, including but not limited to community projects and services addressing visitor impacts in the areas of recreation, public safety, transportation and housing.”

Hyland said he thinks the new tax could allow the town to save money for some larger, more impactful projects of particular interest to the community within these categories, such as expanding the recreation center, for example.

The next step in the process will be for the council to vote on an ordinance officially establishing the question’s language for the ballot at its Jan. 12, 2022, meeting. Hyland said the town also plans to hold a morning coffee event for the lodging community to update them on what’s new in the town and to assure them the tax would create resources beneficial to visitors, too.

“It’s just making sure that the lodging community understands that funds generated from lodging tax would still be in support of our visitors and not just our locals,” Hyland said.

After council votes to officially establish the ballot question, town staff will no longer be allowed to engage in any lobbying or campaigning for the question.

“At that point, we would simply be able to provide to the community the statements of fact, which is, ‘Here’s what the tax would be, here’s how it would be utilized’ and any other factual information, but not lobbying for the passage.”

The April ballot will also include four seats on council up for election, including the mayor’s. Hyland said Town Council member Tanya Shattuck will soon be moving out of the community, so there will be a new council member appointed sometime before the election, too.