Senate committee advances bill letting counties ask voters to raise lodging tax cap to 5%

The Senate Local Government & Housing Committee on the bill advanced House Bill 12‑47, a measure that would let county governments ask voters to increase county lodging taxes above the existing 2% cap to as much as 5% (the bill was introduced seeking a 6% cap). The committee adopted an amendment that clarifies use for fire protection districts and timing for referring measures to voters, and voted 5‑to‑1 to send the bill to the Committee of the Whole.

Sponsors and county officials told the committee the change is a local, voter‑approved tool to help counties respond to visitor impacts and chronic service funding shortfalls. "House Bill 12‑47 is really . . . a common sense measure that gives counties the flexibility they need to support critical local services while maintaining voter oversight," said Senator Chris Simpson, prime sponsor. Senator Dylan Roberts, co‑prime sponsor, told the panel the bill "modernizes the existing county lodging tax framework by increasing the allowable tax rate and broadening how funds can be used to address local needs," while preserving the requirement that counties put any increase to a public vote.

Why it matters: sponsors and many commissioners said tourism increases demand for roads, water treatment, emergency response, housing and childcare and that counties lack flexible, dedicated revenue sources to address those costs. "Counties are the front line of public service in Colorado," said Scott Weaver, president of Counties and Commissioners of Colorado (CCI). Commissioners from Summit, Eagle, Archuleta, Gilpin and other counties described local examples: Eagle County reported about $3 million generated by a 2% county lodging tax and an unmet childcare funding need commissioners said totals tens of millions of dollars; Summit County officials said lodging tax revenue generates roughly $1.3 million per year per percentage point in their county and cited road and emergency‑services needs.

What the bill would do: as amended and reported by sponsors, HB 12‑47 would (1) allow counties to place on the ballot a proposal to increase the county lodging tax above the current 2% cap up to a maximum of 5% (the introduced version sought 6%); (2) expand the statutorily allowable uses of county lodging tax revenue beyond tourism promotion to include housing, childcare, public‑infrastructure maintenance (roads and bridges) and enhanced public safety functions including funding for law enforcement, fire protection districts and EMS; and (3) preserve voter approval as a required step before any increase takes effect. Senators and county witnesses emphasized the increase is permissive: counties must choose to place a measure before voters, and voters must approve it.

Opposition and concerns: representatives of resort and lodging industry groups warned that higher county lodging taxes could make some Colorado destinations less competitive and disproportionately affect businesses that rely on out‑of‑state visitors and meetings business. Jim Clancy, executive director of Beaver Creek Resort Company, said a higher unincorporated county rate could "drive visitors to other areas with lower rates" and reduce overnight stays and local spending. Pete Van Heughan of Colorado Ski Country USA and Julia Koster of the Colorado Lodging & Resort Alliance asked for a smaller increase or a phased approach (they proposed 4% or a multi‑year step‑up) and asked for stronger transparency and accountability measures for county spending of new lodging tax revenue.

Committee action and amendments: the committee adopted Amendment L006, which clarifies that an allowed public safety use includes funding for fire protection districts and makes technical changes to when a county must refer a proposed lodging tax increase to the ballot (coordinated or general election timing). Senator Roberts explained the amendment. The committee then voted to advance the bill as amended to the Committee of the Whole by a 5‑to‑1 margin; Senators Bazely, Liston, Snyder, Winter and the chair voted yes; Vice Chair Gonzales voted no; Senator Rich was excused.

What remains unresolved: sponsors said several counties want the full 6% cap that was in the bill at introduction; many county witnesses urged restoring 6% before final passage. Opponents urged guardrails to prevent ‘‘stacking’’ with municipal taxes that can push combined lodging taxes and fees to much higher levels in some locations. Several witnesses also recommended clearer accountability and reporting requirements on how counties spend any additional lodging tax revenue. The bill as advanced does not change municipal authority and does not itself raise taxes — it allows counties to seek voter approval for an increase.

Next steps: HB 12‑47, as amended, will go to the Committee of the Whole. If reported out of that stage, individual counties would still need to adopt enabling county action and secure voter approval before any tax increase takes effect.