Basalt Town Council took a more tempered approach to a potential lodging tax increase, choosing to ask voters to raise the tax by 2% instead of doubling it.
The increase would not exceed $300,000 annually in new revenue and add to the town’s affordable housing coffers, which would go toward increasing the supply of workforce housing, allowing the town to partner on regional housing efforts and support housing cost reduction programs like rental or maintenance assistance.
The council voted unanimously Tuesday to include a ballot question in the Nov. 4 election that would increase Basalt’s lodging tax from 4% to 6%. Councilmember Hannah Berman was absent.
Most of the council members balked at the proposed 4% increase, which would have doubled the existing tax from 4% to 8% and yielded up to $600,000 in annual revenue. During the first discussion of the ballot question on Aug. 12, the council expressed similar reservations and voted to approve the 4% ask 5-1, with Councilmember Ryan Slack voting it down.
The lodging tax applies to all short-term (30 days or less) accommodations and is calculated based on the gross sales of lodging services, which includes all fees (other than taxes) associated with providing accommodations. Examples include pet fees, cleaning fees, booking fees, manager fees, according to the town of Basalt.
The tax currently yields about $500,000 annually.
Kris Mattera, president and CEO of the Basalt Chamber of Commerce, said while the chamber recognizes the importance of affordable housing, its members would have appreciated participating in structural conversations ahead of considering the tax ask.
“I’m just asking if council would provide the opportunity to at least sit down, maybe do a work session with the chamber or work with staff as well as some of our lodging partners, to better understand what the impact of this lodging tax would be, fully recognizing that there needs to be funds identified and brought together for affordable housing purposes,” Mattera said at the meeting.
Councilmember Angèle Dupré-Butchart suggested tapering the increase to 2% instead. Most other councilmembers agreed that the 4% increase would be too high and potentially push out tourism. Instead, they said, a future council could vote to put another tax increase question in front of voters if they felt it was necessary.
“We may have voter support for this, but just because the voters support it — because they know that they’re not going to be the ones paying for it or suffering the consequences of it — doesn’t make it the right thing to do,” she said. “Because I really believe that the business owners and the lodging community are such an important part of our community and our economy, even if they aren’t the voters, that I think we owe it to them to suss this out a little bit more.”
Slack agreed that the tax increase could harm Basalt’s tourism economy.
“I think we might be undermining some of the economic prosperity or the economic impact that these guests are bringing to our town,” Slack said.
For example, the 4% increase would take the lodging tax on a $200 hotel room from $8 to $16 for one night.
Mayor David Knight pushed for the 4%, but ultimately voted in favor of the 2% amendment.
A community survey administered by WR Communications this year showed that 66% of 162 respondents supported the 8% tax question.
The potential tax increase comes just a few months after the town implemented a $2,532 per-bedroom fee on short-term license holders in the town — a fee that drew the ire of some in the local real estate and short-term rental communities.
Supporters of the fee called it a necessary tool to combat the cost of housing for locals while others called the flat, per-bedroom fee burdensome to locals who rented out their homes or Accessory Dwelling Units for cheaper than larger, luxury homes.
It passed 4-3 in May, with Dupré-Butchart, Slack and Councilmember Rick Stevens voting it down. The three supported a lodging tax increase, instead, as a fairer alternative.
A lodging tax increase was floated during those discussions as potentially more equitable, applying to hotel/lodge guests and short-term guests — not a bedroom-based fee, but based on the price of the lodging.
