Steamboat Springs’ quest to diversify its funding streams could see voters consider a vacancy tax later this year as well.
Steamboat Springs City Council directed staff to start drafting language around imposing a new lift ticket tax at Steamboat Ski Resort on Tuesday, a move that could open up a new revenue stream that local officials have long been hesitant to tap.
Not only does Steamboat Springs not have a lift tax currently, but there is a longstanding agreement between Steamboat Ski & Resort Corp. and the city that aims to avoid one. But as City Council is looking at increasing expenses and sluggish growth in sales tax collections, finding new revenue sources is top of mind.
In addition to a lift ticket tax, Council agreed on Tuesday to have staff begin working on a potential vacancy tax proposal as well, which would seek to generate revenue from homes that are not occupied for a certain amount of time each year. If a vacancy tax is brought and ultimately passed by voters, it would be the first of its kind in Colorado.
“I think these two from a political point of view would be easy to pass,” said Council member Bryan Swintek. “Getting funds for the general fund are desperately needed and are very hard to pass.”
While Steamboat saw surges in sales tax revenue during the pandemic — a 22% increase in 2021 and a 14% increase in 2022 — the last two years have not been as impressive. Last year saw an increase of less than 2% in sales tax revenues and 2023 saw an even smaller 1% increase, according to data presented by City Finance Director Kim Weber. Sales tax is the primary funding source of the city’s general fund.
Tuesday’s work session was the first of two planned to focus on fiscal sustainability — the second is scheduled for next month. Both taxing measures would need voter approval. Tuesday’s discussion projected that either or both measures could be brought as soon as November.
Since 1984, the city has had agreements in place with Ski Corp. that saw the resort make contributions to the city as long as a lift tax wasn’t imposed. Currently, that agreement sees the resort collect city sales taxes on parts of the mountain that are technically outside of the city’s taxing jurisdiction, as long as the city doesn’t impose “any new or additional tax on the Ski Corporation’s operations of the Ski Area (such as a lift tax),” according to language of the agreement shared by Weber.
This money is considered a “voluntary assessment,” and the city has no way to audit these collections. It shows up in the budget as a donation, Weber said. In 2024, this resulted in $465,000 in revenue to the city’s general fund and another $58,000 to the Steamboat Springs Education Fund Board.
“The math doesn’t add up, so there must be another piece here. Why have we not passed one?” Swintek asked Weber.
“It just hasn’t been the will of the city council to put it on the ballot or put it to the voters,” Weber responded.
Council member Michael Buccino said a lift tax has long been an "unused deposit" of revenue for the city. Last month, Buccino told The Yampa Valley Bugle that resort funding of $1 million to support a regional transportation authority could be contingent on the city not imposing a lift tax.
“The negotiation that we need to do right now is sit down with Ski Corp. in a very amicable way and say, ‘guys, we’ve been kicking around this for a long time,’” Buccino said. “We are now ready to do something and I think Ski Corp. has shown … that they are ready to do something as well”
Sarah Jones, director of social responsibility for Ski Corp., said the resort is supportive of a lift ticket tax as long as it is used for “innovative transportation solutions,” such as the RTA. She stressed that the city should invite Ski Corp. to the table for any lift tax discussion.
“We have had those discussions about a lift ticket tax and the possibility of a million-plus dollars going to an RTA,” Jones said during public comment. “We struggle with this pursuit of a lift ticket tax for [Steamboat Springs Transit] and see it as jeopardizing funding for the RTA. … Bring us to the table.”
A lift ticket tax could be imposed in two main ways — an additional sales tax on tickets or a flat fee per ticket sold.
In 2015, Breckenridge voters approved one of the first lift ticket taxes put in place in Colorado. This tax assesses 4.5% on a daily or multi-day lift ticket, not including season passes or summer lift tickets. The way this tax was written, it has a minimum amount it collects each year, in case the use of daily lift tickets was to drop off. That minimum amount was $3.5 million in 2016/2017 and is increased by a measure of inflation of between 1% and 4% each year.
City staff did not have an estimate for how much revenue a lift ticket tax in Steamboat could produce.
The Breckenridge lift tax funds transportation and parking improvements. Whether a Steamboat lift tax would support a specific city service or whether it would go toward the general fund was a question council members appeared divided over.
Swintek argued that funding from a lift ticket tax should not be restricted, rather it should go toward the city’s general fund. While there may have been agreements in the past, Swintek said the dynamic between the city and resort has changed and that he believes the city has the upper hand.
“We are not talking about a local, family-friendly resort anymore, we are talking about a multi-billion dollar company,” Swintek said, pointing to the ownership of Alterra Mountain Company. “We have the upper hand and we are kidding ourselves if we don’t think this [would] pass.”
Denver-based Alterra Mountain Company is owned by KSL Capital Partners and Henry Crown and Co., the latter of which is a private company owned by the Crown Family. The Crown Family, which traces back to Chicago financier Henry Crown, is considered the 30th richest family in America in 2024 with an estimated net worth of $14.7 billion, according to Forbes.
Council member Steve Muntean replied by saying that while he can’t disagree with Swintek’s ownership point, he felt that it was still important that Ski Corp. be involved in lift tax conversations from the start. He pointed to contributions the resort has made to the city via the agreement in place, as well as their support for the Local Marketing District and efforts to form a Regional Transportation Authority.
“We can sit down with them and talk about what’s in our best interest and what’s in their best interest, and have a negotiation which hopefully would come to a win-win around all of these things,” Muntean said. “I would personally not support anything that wasn’t a negotiation with them as a first step.”
Interim City Manager Tom Leeson said he felt the next step is to sit down with Ski Corp. and talk about a potential lift ticket tax while also working to draft language around a lift tax for council’s March meeting.
Council member Amy Dickson said the elephant in the room of the lift tax conversation for her was what she sees as a lack of partnership between the city and Ski Corp. when the resort expanded terrain and skier capacity on Mount Werner.
“I’m not suggesting Ski Corp. should be paying for everything — I am suggesting they should be paying their fair share,” Dickson said. “We heard from our prior city manager they were not.”
City moving forward with vacancy tax concept
City Council members also directed staff to move forward with the idea of a vacancy tax, which would impose some level of tax on properties that are vacant for a certain amount of the year. City Attorney Dan Foote said there are very few such measures in place currently in North America.
Foote said it is important for the city to decide what the purpose for the vacancy tax would be, and then write the policy around that. While other measures in places like Vancouver, Canada and San Francisco have used vacancy taxes to disincentivize vacancy and promote long-term rentals or owner occupancy, Foote suggested Council consider the purpose of this tax to be revenue generation.
“A vacant home that doesn’t have people in it is not generating a lot of sales tax revenue and is probably not generating enough property tax revenue to pay for the kind of services that even a vacant home requires,” Foote said.
How much revenue measure a vacancy tax could generate is not currently understood and would depend on how a vacant home is defined in the tax measure. A vacancy tax could be a flat rate or it could be based on another factor like the number of bedrooms or square footage of a home, Foote said.
Another key question with this tax is how it would impact short-term rentals. Foot said in San Francisco, the vacancy tax considered units that are short-term rented as vacant.
“It’s very easy to explain to us and I think to the public why we would want to impose a truly revenue tax on vacant homes,” said Council member Joella West. “I think it’s fair and I think its saleable.”
Council is expected to have another discussion about both the lift ticket tax and a vacancy tax at its March 11 work session.