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Merchants broach subject of a new marketing tax

Naomi Havlen
Aspen Times Staff Writer

The Aspen Merchants Association met earlier this week with the Aspen Chamber Resort Association to discuss improving the local economy, and a new general sales tax for marketing garnered the most attention in the merchants’ group.

The two organizations, with an eye toward Snowmass Village’s new marketing tax, agree that Aspen needs to bring more people to town to boost economic vitality, and this week they’ve been brainstorming how.

Currently, ACRA’s marketing dollars come from half of a 1 percent lodging tax that was approved by voters in November 2000. This past year the tax meant that ACRA had about $400,000 to spend on promoting Aspen.

But according to a 2002-03 study of resort association marketing budgets by the Colorado Visitors Bureau, resorts like Vail, Steamboat Springs and Park City, Utah, are operating with millions. And since voters approved a 2.5 percent general tax in Snowmass Village in November, that resort is expected to have $2.5 million a year to spend on its own marketing.

Preliminary research by the city indicates that a 1 percent sales tax in Aspen would raise approximately $3.7 million annually.

“People want more visitors to come to town, and right now our visitors have all the burden [of paying for resort marketing through the lodging tax],” said ACRA President Hana Pevny. “It’s a philosophical question we’re asking: How much of the burden will we take on ourselves? What portion should be ours and what portion should be the visitors’? We’re a long way from making that decision.”

This week’s meeting focused solely on the positive and negative impacts that a sales tax might have in Aspen, while the merchants group, with help from ACRA and city staff, took part in group exercises aimed at dreaming up the best methods for raising new resources.

Besides a general sales tax, those ideas included a property tax, creating a special taxing district like in Aspen’s commercial core, reappropriating current tax dollars, or even placing a “luxury tax” on items sold for over $120.

“This is just one sector of the community,” Pevny said about the opinion of the merchants group. “It’s an issue that’s bubbling up as we see the amount our competitors are spending. Our next step is working jointly with the city and other sectors of the community to get their responses. Do we go and proceed with raising more funds to stay competitive?”

Since items about tax issues must appear on ballots in November, rather than in special elections, Pevny said the soonest any potential item would be on the ballot would be November 2004. There are many decisions to be made in the meantime, and a large amount of public discussion regarding the need for such a tax.

The merchants’ group also discussed how much money would truly be needed to stay competitive, and figures ranged from the town’s current marketing budget to upward of $10 million.

On Tuesday ACRA’s marketing committee generally focused on the negative aspects of proposing an increase in the general sales tax. For example, committee members noted that besides a negative community reaction to a general sales tax, there would be a lot of unknowns to decide, like how much of the money is going to be spent and who would overlook the spending.

The committee also considered that there could be a lot of entities competing for the tax dollars, and yet it is unknown if spending a certain amount of money on advertising would even bring visitors to Aspen in the first place.

[Naomi Havlen’s e-mail address is nhavlen@aspentimes.com]


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