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Commissioners question raising county lodging tax as tourism revenues, hotel supply and wastewater constraints weigh in
Summary
Lake County commissioners discussed a proposed state bill to raise county lodging tax to 5% (subject to local voter approval), reviewed current lodging revenues and expressed concern that market and infrastructure conditions — including wastewater capacity and declining hotel supply — make an increase ill-timed.
Lake County commissioners spent a portion of their work session discussing statewide legislation (House Bill 1247) that would allow counties, with voter approval, to increase lodging tax rates up to 5 percent and expand allowable uses to items such as public infrastructure maintenance and public safety. County tourism staff and commissioners also reviewed local lodging tax revenue, enforcement challenges following a municipal accommodations tax, and structural barriers to attracting new commercial hotel development.
Natalie, a tourism staff member who addressed the board, summarized the county’s lodging revenue picture. She said county-collected lodging tax revenue for 2024 was about $155,000 and Leadville’s accommodations tax that flowed to the tourism panel was $136,000, for a combined total budget of roughly $291,000 for visitor services, the visitor center and marketing. The county’s lodging tax rate is 1.9 percent; the City of Leadville’s accommodations tax is 4.92 percent and supersedes the county tax within city limits. The presenter said that when Leadville implemented its accommodations tax and set up remittance through MuniRevs, compliance was incomplete and the tourism panel missed approximately $100,000 in revenue in the early phase; some of those collections are now time-barred.
The board considered HB 1247’s proposal to raise the allowed county lodging tax rate to 5 percent (subject to voter approval) and to expand authorized uses. Tourism staff estimated that a full increase could yield roughly $175,000 annually based on 2024 collections, but warned that the figure depends on future visitation, market pricing and lodging supply and could erode visitor demand if perceived value declines.
Discussion turned to local supply and pricing trends. The tourism presentation included data showing a large single loss of commercial inventory (the Silver Canyon Suites) and broader market shifts since the COVID-19 period. Commissioners and tourism staff noted that many short-term rentals and lodging providers have shifted to dynamic pricing, which has pushed average daily rates higher. The conversation highlighted a mismatch: increasing prices and fewer commercial beds can drive down occupancy; people may visit Lake County without staying overnight if there is insufficient or unaffordable lodging.
Commissioners and staff discussed enforcement and administration. The City of Leadville contracted MuniRevs as a remittance platform and later added a contractor (Deckard) for enforcement. Tourism staff said the city had not accepted a request to make the tourism panel “whole” for early missed remittances. Board members expressed concern about revenue leakage and the administrative burden of collecting lodging taxes.
Infrastructure and development barriers were a central concern in the lodging discussion. Commissioners said several potentially buildable hotel sites face wastewater and sanitation constraints; county staff asked the board to visit a candidate wastewater site and meet with sanitation officials and developers. Commissioner Adam Ducharme and other commissioners said the county should not pursue a tax increase while market forces are causing declining demand and supply problems, and they asked staff to return with a clearer list of infrastructure barriers and potential actions to attract commercial lodging investment.
No formal vote was taken on changing county lodging taxes or pursuing HB 1247. The board scheduled a site visit to review sanitation and lift-station options and directed staff to report back with more detailed analysis of barriers to hotel development and options for code or infrastructure changes that could enable lodging investment.
