Not only did a record number of visitors pack Colorado ski areas last winter, but the spendthrift skiing masses left mountain towns awash in record tax revenue.
The past three Colorado ski seasons have hit all-time highs. The ski areas are making more money than ever — as evidenced by record-setting revenue-based annual rent payments to their Forest Service landlords. The sheer number of visitors is growing, reaching a record 13 million in 2015-16.
And sales tax reports show those visitors are leaving more cash in their wake than ever before. Right around 2012-13, ski towns started seeing sales tax harvests inch back to pre-recession levels, with some towns even besting previous highs set in the banner 2007-08 ski season.
The Great Recession pinched visitor spending and most ski towns saw sales tax revenues plummet in 2008-09 as the economy withered.
Resort towns such as Aspen, Vail, Breckenridge, Crested Butte, Telluride, Winter Park and Steamboat Springs enjoyed a robust rebound in 2013-14 and 2014-15 with in-town spending and sales tax collections reaching highs. The record-setting continued in 2015-16, with sales tax revenues reaching highest-ever levels for nearly every ski community in the state. At least six Colorado ski towns saw record tax harvests for every month of the ski season, from December through March.
(For the marijuana watchers eager to credit pot for the surging windfall in small towns: Revenue from marijuana sales in ski towns, while prominent in the news, remains a small percentage of the local sales tax harvest. A dispensary and a modest T-shirt shop direct roughly the same amount of tax money into town budgets. Pot sales in Denver are a huge deal — the city’s marijuana tax revenue reached $29 million in 2015 — but it’s just another shop in a small town.)
So what’s happening with all that extra money in community coffers? Most of it goes toward capital improvement projects that improve both vacations and local resident lifestyles.
But some is directed toward easing the impact of all the extra tourists. Affordable housing, transportation for workers pushed beyond the boundaries of town, and increased community amenities and services are common in ski towns that are now bustling in both winter and summer.
“Impact from the increased tourism is a constant conversation here, as it is in the other resort communities,” said Telluride town manager Greg Clifton, noting that the box canyon hamlet’s summer events continue to grow in both frequency and scope. “We are always looking at ways to mitigate, including discussions about enhanced transit, intercept parking and workforce housing.”
The significant increase in wintertime sales tax revenues coincides with equally vibrant growth in spending and tax revenues in summer. The statewide total spending by summer mountain-town visitors remains much smaller than skiing winter visitors, but the annual rates of growth in summer exceed winter, when communities near capacity and lodging costs peak.
Except for the Town of Telluride, where summer revenues now eclipse winter. The historic mining town throbs in summer with weekly festivals, while the more modern, Mountain Village up the free gondola counts summer as a more relaxed season.
Leaders in Telluride have made adjustments to their spending and saving as revenues climb. Several years ago, the town kept 15 percent of its annual expenditures in reserve. Now it keeps 35 percent.
The Telluride Town Council this year funneled an extra $500,000 into its affordable housing fund, and some of the extra revenue went toward community services.
Aspen’s summer visitors spend more than any other mountain community tourist. The city saw a record $256 million in summer spending last year, from May through September. Winter visitors to Glitter Gulch spent more than $333 million in the December through March span of 2015-16, marking the third ski season in a row for record spending and sales tax haul.
The city’s 1,000-page budget for the coming cycle includes plans for a new police station, consolidating city offices now spread across seven buildings, improving pedestrian safety and hiring back community development employees who were trimmed during the recession.
“We had a serious recession in 2012 and in many ways we are still catching up,” Aspen mayor Steve Skadron said. “We had a bunch of needs back then that we shelved due to the uncertainty around our local economy.”
Across the high country, that’s a theme among communities flush with increased revenues: reigniting capital improvement projects that were mothballed during the downturn.
In Breckenridge, the recent three-year stretch of record-setting sales tax revenues in both winter and summer means the town has opened a new community center, a new theater and a pocket park on Main Street. While tax revenues have exceeded expectations for three years, the town spends anything over budget in the following year, so it’s never caught by surprise by unexpected slowdowns, said Brian Waldes, the town’s financial services manager.
“We’ve been trying to get a lot of capital projects back online,” Waldes said.
It’s easier to invest in capital projects than community services, he said.
“You have to be careful about adding community services because there’s going to be another downturn,” Waldes said. “Cutting services hurts a lot more than cutting a capital improvement project for a year or two.”