Voters in Manitou Springs are deciding whether or not to increase an existing tax on businesses that charge admissions or sell tickets. It would affect only a handful of businesses and aims to address a loss in revenue after the city lost its regional monopoly on recreational marijuana when Colorado Springs residents voted to legalize it there last year.
Here's the language you'll see on your ballot:
City of Manitou Springs Ballot Issue 2A (Vote YES or NO) SHALL CITY OF MANITOU SPRINGS' TAXES BE INCREASED BY TWO MILLION FIVE HUNDRED THOUSAND DOLLARS ($2,500,000.00) ANNUALLY IN THE FIRST FULL FISCAL YEAR COMMENCING JANUARY 1, 2026, AND BY SUCH AMOUNTS AS ARE RAISED ANNUALLY THEREAFTER BY ADDING AN ADDITIONAL NINE PERCENT (9%) TO THE CITY'S CURRENT FIVE PERCENT (5%) EXCISE TAX RATE ON TICKET SALES AND ADMISSIONS FEES, AND SHALL THE RATE OF SUCH TAX BE ALLOWED TO BE DECREASED OR INCREASED BY THE MANITOU SPRINGS CITY COUNCIL WITHOUT FURTHER VOTER APPROVAL SO LONG AS THE RATE OF THE TAX DOES NOT EXCEED 14%, AND WITH THE RESULTING TAX REVENUE BEING ALLOWED TO BE COLLECTED AND SPENT BY THE CITY WITHOUT REGARD TO ANY EXPENDITURE, REVENUE-RAISING, OR OTHER LIMITATION CONTAINED IN ARTICLE X, § 20 OF THE COLORADO CONSTITUTION OR ANY OTHER LAW?
2A explained
Heidi Beedle of the Pikes Peak Bulletin is following the issue. She breaks it down with KRCC's Andrea Chalfin.
(This interview has been edited for length and clarity.)
Pikes Peak Bulletin's Heidi Beedle: Because of the legalization of recreational marijuana in Colorado Springs that sort of ended Manitou Springs' regional monopoly on recreational marijuana–and that was generating a lot of revenue for the city– now they're anticipating a significant budget shortfall moving forward.
To compensate for this loss of recreational marijuana revenue, the city of Manitou Springs is proposing a tax increase. 2A would increase the amusement tax, which is charged for admission tickets and things like that. Currently it's 5 percent and it would increase it up to (as much as) 14 percent. The city council has provided variability with the language, so it could be 14 percent when they need it and then they can drop it down to 12 or 10 percent based on their income needs.
KRCC's Andrea Chalfin: And this would only affect a handful of businesses, right?
Beedle: It would only affect businesses that charge admission tickets. And at the moment, it's Adventures Out West, which is a zip line company, the Pikes Peak Cog Railroad, the Iron Spring Chateau, which does dinner theater, Manitou Cliff Dwellings, and a couple other businesses. It's seven businesses in total. And they would be the ones kind of footing the bill for this tax increase.
Chalfin: Why go about it this way?
Beedle: They proposed a couple of different measures. If you want to raise taxes, first of all, you could ask voters to approve an increase in property taxes, which they don't think would be feasible. No one wants to pay more on their mortgage every month. So you could increase property taxes, you could cut services, you could cut fire and utilities and various other things.
And Manitou Springs has a lot of deferred maintenance and aging infrastructure. There've been a lot of city council discussions around the Ruxton Avenue corridor and the water infrastructure there and utilities. There's no really ideal option. Mayor John Graham was very emphatic. He said, we don't have a heck of a lot of options. The current 2A initiative was proposed by city councilors Jonathan Shada and Natalie Johnson as kind of a balanced approach.. Not only would they increase this tax on the entertainment fees, they would also shift some money from parking revenue into the general fund and make some adjustments there.
Chalfin: I can't imagine the folks who run these businesses are all that excited about this.
Beedle: They've been very outspoken. There is a "No on 2A" campaign. Greg Wellens, who is the owner of Adventures Out West, has been the person on the forefront of this, pushing back against it.
These business owners, they see it as an unfair tax. They feel that they were left out of the discussions, they weren't really stakeholders during the process. And they feel that it's almost a triple tax on what they're currently paying. So they feel that that is disproportionate. They do have concerns that it will impact them, that people aren't going to want to pay this increased tax rate and so that will lead to a decline in tourists and Manitou and some of these second and third order effects.
Also, it's worth noting that among the businesses that would be impacted, probably the primary business is the Pikes Peak Cog Railroad, which is currently involved in a legal battle with the city of Manitou Springs over the tax agreement agreement.
Chalfin: Does this have anything to do with those legal issues surrounding the railway and the city?
Beedle: There were some allegations. People have inferred that. But yes, the railroad is currently suing the city of Manitou Springs over violations of this excise tax reimbursement agreement that they've had since 2017. The Cog Railroad has also been outspoken in opposition to this tax. There was a letter that the manager of the Cog Railroad had sent the city of Manitou Springs urging them to not approve this ballot measure. It's a contentious issue that some people have raised their eyebrows at.
Chalfin: You mentioned that the mayor, John Graham, said options are limited and obviously these business owners are not very happy. Should this fail, what's next?
Beedle: Potentially they would have to come up with another solution to the budget deficit. One of the issues that the business owners brought up was that currently the city of Manitou Springs does have a budget surplus. They've got around $5 million or so, just kind of sitting there. And they (the business owners) brought up the point that we don't need to increase taxes right now while we currently have a surplus. The city's position is that it's good to have a surplus in case things come up, particularly the aging infrastructure that fails and needs to be repaired or any of these other issues.
So potential solutions to the budget deficit would be sort of burning through the surplus. And then if you burn through it in a year or two at that point, then you would have to consider cutting budget, cutting services, fire police infrastructure, those sorts of things.
And the city of Manitou Springs has engaged in some budget cutting measures over the last year. They've cut around $600,000 out of the budget by leaving some open city staff positions vacant and going through and freezing spending and doing all of those things. These budget discussions about what to do around recreational marijuana have been ongoing for about a year now.
