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Municipal Lodging Tax Idea Presented to Lamar City Council

Chris Wilkinson

Chris Wilkinson

The idea of a municipal lodging tax was presented by two of its proponents to the Lamar City Council during their work session, Monday, April 24th.  A 2% lodging tax currently exists for guests of motels throughout Prowers County.  The one recently proposed would be for Lamar motels.  Lamar residents Pat Palmer and Chris Wilkinson discussed the benefits that would come from passage of the new tax which would have to be approved by a majority of Lamar residents, perhaps as early as the November elections.

The funds derived from the new lodging tax would be used for an events planner salary, marketing, travel, office expenses, equipment and to eventually construct a permanent events and convention center for Lamar. The current lodging tax only funds requests for advertising, marketing and contract fees and is administered by the Lodging Tax Panel whose members are appointed by the county.    Wilkinson provided the council with a sliding scale and finance sheet for potential revenues based on the percentage of taxes that would be levied on motel rooms, from 1% to 5%.  The Lodging Tax Panel’s 2% tax generates approximately $100,000 a year explained Wilkinson.  “The new tax could raise as much as $250,000 each year based on a 5% tax on motel room use and wouldn’t have any of the restrictions the current Lodging Tax carries,” he told the council.  By comparison, La Junta’s tax generates $135,100 a year with fewer motel rooms than Lamar and Finney County in Kansas generates $824,500 each year. Denver, for example, has a room tax rate of 10.75%.

The initial Lodging Tax concept was met with resistance years ago by some residents and motel owners claiming the tax would drive away potential customers. In fact, it was defeated the first time it appeared on a ballot but was passed on the second try.  Proponents, at that time, stressed the tax would not impact local residents, but was based only on a motel room being rented.  A $100 a night room would be taxed $2 extra dollars by the user based on the 2% rate.  Those in favor of the Lodging Tax argued it would be hard to understand someone who would not pay the rate in Lamar, and instead travel the 60 or 90 miles to La Junta or Garden City where they would have to pay the lodging rates in those cities anyway.  Retail sales tax revenue in Prowers County since the local tax was instituted hasn’t shown any downturn in motel use or negative impact for motel owners/operators.

Lamar City Attorney, Garth Nieschburg, agreed when asked, to assist the group of residents with some of the legal aspects of turning the idea into an ordinance for a future ballot. Nieschburg said this will be a TABOR issue when dealing with tax revenues in the public sector.  “One way would be to circulate petitions which require the city clerk to verify the signatures of about 200-plus persons needed to move this forward,” he explained, adding it would then be referred by the city council to local voters.  The alternative would be to have the council initiate the ordinance which would be simpler.  “That doesn’t mean the city takes a stand on the initiative,” he stated.

City Clerk, Linda Williams, said the cost of the proposal, which is not certain at this time, is not in this year’s budget as some expenses for publications, pamphlets and the vote on the ballot would have to be paid for. She explained that for the vote to be on the November ballot, the second reading of the ordinance would have to be done by the council by their first meeting in July.

Wilkinson said the concept of the tax has been developing for over two years and most recently from meetings with area residents including Angie Cue, George Gotto, Jim Larrick, Eric Depperschmidt, Aaron Leiker and Rose Ann Yates as well as Pat Palmer. He added that the 5% level, if approved, could develop as much as $117,000 which will be dedicated to local improvements including refurbishing the steam engine at the Welcome Center, highway signage south of Lamar, upgrades to the baseball complex as well as other projects already recognized by the Lamar City Council.  “We easily identified over two dozen local historically based tourist areas in the community and have compiled the number of events booked at the fairgrounds for the past two years.  There’s room for growth especially if we have an individual dedicated to organizing the events and attracting conventions back to Lamar like they were years ago,” said Wilkinson.

By Russ Baldwin

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