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Try a tourism severance tax

Published 7-Nov-1993 in the Denver Post
Copyright ©1993 by Ed Quillen. All rights reserved.

Despite the failure of the Tourism Promotion Tax last week, it's hard to believe that tourists will just quit coming to Colorado, despite all the anguished wails that we are now the only one of the 50 states that doesn't tax motel rooms in order to encourage more people to come see No vacancy signs.

After all, we heard similar dire warnings 20 years ago, when Colorado was the only place in the world which ever refused a Winter Olympics after getting designated to host them.

We've offended the world, the boosters cried, and no one will come. The result was a 10-year boom in tourism and development in general as the montane Interstate-70 corridor became a gaudy extension of West Colfax Avenue.

One problem with deliberate promotion is that nobody knows how. Look at the Disney Corp. It's got to be the world's authority in building, promoting and operating tourist attractions. The company has lost $300 million so far on Euro-Disney, with 1,000 lay-offs; attendance has been far below expectations. If Disney can't figure out how to make them come and spend money, can we reasonably expect better from any Colorado Tourism Marketing Board?

Conversely, if you take an opposite approach, you can attract hordes of visitors because magazine editors love articles about undiscovered places. They eat up stories about uncrowded mountain bike trails or new stretches of dangerous white-water or friendly local ski areas without lift lines.

They'll do our promoting at no cost to the taxpayer. However, last year's quaint, adventurous and off-the-beaten-path undiscovered haven becomes next year's run-of-the-mill overcrowded locale with tacky souvenir shops, overpriced theme restaurants and T-shirt stands.

So perhaps there was really no need for a tax to promote tourism. If such taxes must be levied, the state legislature could try a different approach when it convenes next year.

Start with a Tourism Severance Tax. Severance taxes are generally levied on non-renewable resources, and quaint undiscovered vacation gems certainly aren't renewable -- once they're discovered by eager magazine editors and greedy exploitative writers, they've vanished as certainly as the Kentucky anthracite that got hauled out on Mr. Peabody's coal train.

The depreciation interval should be about 30 years; I base this on statements from some California immigrants quoted in the Post last week. One said Denver is what L.A. was like 30 years ago when the air was cleaner, the cost of living lower and people less stressed. Apparently it takes three decades to go from a livable, affordable landscape to an expensive, trashed environment.

What to do with the tax proceeds? We put them in a Tourism Impact Fund, and affected communities will apply for Tourism Impact Grants for things like public restrooms, historic preservation, affordable housing, improved museums, better schools and larger libraries. They'll be better able to accommodate the human stream, and with investments in improved community facilities, they'll have something to fall back on when the tourism rush ends.

Some will argue that tourism isn't just another industry, and they're right. No other industry pays such rotten wages or expects such servile deportment from its chattels, who find themselves living in tents and caves if they're not commuting 50 miles each way on twisting, narrow, icy roads.

Few other Colorado industries ever expected the general public to support their promotion, either. Have you noticed a tax on all paperbacks to promote the works of Colorado writers, a tax on all computers to tout software from Colorado programmers, or a tax on all furniture to publicize Colorado cabinetmakers?

If we must tax tourism, why not forego promotion, and tax it so that the proceeds improve life in today's company towns?


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