Read part one
On Tuesday, August 3, the six city councils had many options for discussing how to deal with vacation homes. (One councilor, Mat deGraaf, was absent.) First, they received four recommendations from the Urban Planning Commission regarding the Pagosa housing crisis, and specifically regarding STRs. (Short term rentals; but I prefer the term “vacation rentals” as this is their primary use.)
Three weeks earlier, the planning commission had received a briefing from planning director James Dickhoff, in which it was made clear that vacation rentals in commercial areas of the city are a “legal use”, but in residential areas a “conditional use permit” is required. Mr Dickhoff also noted that the community’s complaints about vacation rentals in general originate from residential areas.
According to the minutes of the planning commission, downtown resident Chrissy Karas testified at the meeting. She “said the area was always calm and safe. She explained that she had a drone aimed at the windows of her house and that one side of the house has been converted into a vacation rental and it is not well maintained, garbage is building up, the garden is not being maintained.
Further down the approved protocol, Planning Commissioner Chris Pitcher reached out to the commission, first noting that the vacation rental industry is another function that allows us to serve the tourism sector that created Pagosa, but the impact is really having an impact on that Accommodation of workers. Would support the method of taxation as commercial. If the owner wants to live in it or rent it long-term, it could be a residential house again. He added that he would like tenants’ tax to be diverted to resolve this issue. He is of the opinion that self-used units should be allowed. Asked whether short-term rents in mixed-use districts are taxed as commercial or residential property. The legal counsel made it clear that there is a difference between a tax and a fee that a tax must be voted on and not put into the community fund as earmarked money for “housing”. It is recommended not to call it a tax, as a fee disguised as a tax can be challenged. “
Some of us may question the quoted claim by Commissioner Pitcher that “the tourism sector created Pagosa”. According to the only taxation analysis I came across (conducted by the Daily Post), tourism has historically contributed less than 20% of sales taxes levied in Archuleta County and little in property tax revenue. Tourists contribute a large part of the lodgers’ tax revenues, but all of that money is currently being wasted promoting more tourism. (Of course, not everyone thinks it’s wasted.)
I did not attend the Planning Commission meeting on July 13th, so I am quoting from their approved minutes without being able to vouch for their accuracy. But I have certainly heard claims very similar to those attributed to Commission Pitcher at previous meetings of the Planning Commission.
I have also written extensively here in the Daily Post about the difference between a “tax” and a “fee” – a difference that is often misunderstood (or ignored) by our local and state decision-making bodies.
Legally, the term “tax” refers to money that is withdrawn from a taxpayer without any commitment that the tax will benefit that taxpayer “directly”. The money raised is typically used for general public purposes – roads, schools, police, parks, health care, poverty, land use planning, transportation, and so on. There is no guarantee that the taxes I pay to the school district, for example, will benefit me directly. The same goes for law enforcement agencies, hospitals, and child protection services.
The Colorado Constitution states that state and local governments must obtain voter approval before introducing a new tax or increasing the amount of an existing tax.
“Fees” are a different animal. Or rather, they should be a different animal. But often they are not.
As defined by law, a “fee” is money that is withdrawn from a customer to reimburse the government for the cost of providing a specific service that is not made available to the general public. For example, when I contact my local building authority for approval of a new commercial or residential construction project, I pay a “permit fee” which supposedly covers the cost of reviewing and approving my building plans, conducting site visits, and various other services. Ideally, a fee would exactly cover the government’s time and expense in providing the requested service. Indeed, the amount of a government “fee” is sometimes disproportionate to the cost of the service provided.
When the “fee” is far higher than the actual cost of the service, it becomes a “tax”. (IMHO.)
To reiterate the above quote from the minutes of the planning commission: “The legal advisor has made it clear that there is a difference between a tax and a fee, and a tax must be voted on and it does not go into the community fund as earmarked money. Casing’. It is recommended to be careful not to call it a tax, as a fee disguised as a tax can be challenged … “
Obviously, money that my government pulls out of my pocket – or anyone else’s pocket – to subsidize workers’ housing for an entirely different group of people is not a “fee.” It’s a tax.
The Lodgers Tax is by definition and name a tax.
The people who pay the Lodgers Tax are visitors to Pagosa Springs who enjoy the community we – the full-time residents – entertain with our sales taxes, property taxes, blood, sweat, and tears. In my opinion, a Lodgers Tax can be used ethically for general community purposes, just as sales taxes and property taxes can be used for general community purposes. Through the Lodgers Tax, tourist visitors could then help ensure a healthy overall economy for Pagosa Springs, just like the rest of us.
Legally, a Lodgers Tax can be used in any way that city voters believe it should be used. (In my humble opinion.) And this is one of the four recommendations that the planning commission wanted to pass on to the city council: to use the rent tax differently in order to cope with the housing crisis.
On August 3, the city council pondered the idea of reassigning tenant tax, somewhat puzzled, but couldn’t agree on how to take the baton.
There was a lot of discussion back and forth, with different points of view being represented. But no definitive decision has been made … just like no significant housing decisions have been made in at least eight years.
As the crisis got worse … and worse …
Read the third part tomorrow …
Bill Hudson began sharing his opinion on the Pagosa Daily Post in 2004 and cannot break that habit. He claims that Pagosa Springs opinions are like pickup trucks: everyone has one.