Tourism is rebounding across the state, but the coronavirus pandemic is expected to keep revenues from lodging and car rental taxes down next year, greatly limiting the events the city of Colorado Springs can fund.
The city’s 2% lodging tax and 1% car rental tax are expected to generate about $5.7 million in 2021, down from the $8.19 million it was projected to generate in 2020, a decline of about 29%, the proposed 2021 budget shows. The projected 2021 revenues, however, are fairly close to the $5.47 million the two taxes are expected to generate this year.
Much of that tax revenue funds organizations such as VisitCOS, a marketing agency for the region, and the rest goes to events.
The projected slide in revenue means city funding for those events next year will likely be pared down to some of the long-time community traditions, such as the Festival of Lights parade, 4th of July, Labor Day Lift Off, and Pikes Peak International Hill Climb, the budget shows.
“They are all community events that help reaffirm who we are as a community. … I personally think those things are a bit more important when we are going through a time of such stress,” said Laurel Prud’homme, chairwoman of the Lodgers and Automobile Rental Tax Citizen Advisory Committee.
The city expects to spend $385,735 on events in 2021, down from the $1.7 million budgeted for more than 20 events in 2020. Much of the city’s event funding in the past was distributed in small amounts of less than $100,000 to help to seed sporting events, music and education festivals that draw visitors to town and thereby boost revenue for the city.
The variety of events the city has funded in recent years has helped contribute to a vibrant community, said Deborah Thornton, executive director of Imagination Celebration, the group that hosts the What If… Festival of Innovation and Imagination in downtown Colorado Springs each September.
“You want this smorgasbord available for the citizens so that you find different ways to engage them in the life of the community,” she said.
Event planners were notified in May that the city would not be accepting applications for 2021 funding, Prud’homme said.
“If the revenue is not coming in, there is no way we can turn around and hand it out to different groups,” she said.
Funded events in the city’s proposed 2021 budget
4th of July
Pikes Peak International Hill Climb
Labor Day Lift Off
Rocky Mountain State Games
Pikes Peak or Bust Rodeo
Fallen Fire Fighter Memorial
Festival of Lights Parade
Veterans Day Parade
Western Street Breakfast
Starlight Spectacular, a bike ride hosted by the Trails and Open Space Coalition
Holly Berry House Folk Art Festival
The city also saw a shortfall of $4.7 million for projects and organizations that expected to receive lodging and car rental taxes this year and had to cut $3.4 million in spending, Prud’homme said. The city saved $1.3 million through event cancellations and also drew on its reserves to make up for the shortfall, she said.
Much of the impact of city budget cuts was lessened because events could not take place anyway, given the coronavirus restrictions, she said.
However a few events that were held, such as the 4th of July Symphony on our Porch and dispersed Labor Day Lift Off, reached more people than the traditional versions of the events, Prud’homme said.
“This year, they brought people together in newer, safer ways,” she said.
One of the many events canceled in 2020 was the 42nd Annual Holly Berry House Folk Art Festival, an annual fundraiser for the Rock Ledge Ranch in Garden of the Gods Park. The event typically attracts tourists from all over the state, who support the ranch and bolster overall city revenues by staying in hotels and shopping, said Kathy Read, who has organized the festival since its beginning.
To lose many similar festivals and events that raise money for nonprofits and generate tourism all in the same year is just “mind boggling,” she said.
“How do all these events recover and come back?” Read said.
Plans for next year’s Folk Art Festival are in limbo because it is unknown what the pandemic restrictions will be like, she said. However, the city has budgeted $3,000 for the festival in 2021 because the city council committed by resolution to support the event.
Overall, Read is optimistic about Rock Ledge Ranch and the last major restoration project needed on the property, the rebuilding of the 1880s greenhouse, she said.
“It’s in a wonderful place right now. … Millions of people have enjoyed it and we hope millions more will,” she said.
The USA Pickleball Great Plains Regional Championships, an event that drew 475 players to Monument Valley Park last year, likely will not receive the city funding next year that’s supported in the past. Great Plains Regional Directors Steve and Ramona Boone said they expect to cut costs and potentially increase registration fees so the event can go on. The tournament helps to raise funds for pickleball classes and education across the region, they said.
“We still have people that will come, they love Colorado Springs,” Ramona Boone said.
Another former city beneficiary, the What If Festival, an annual event that focuses on highlighting the innovation of educators, businesses and gig workers across the region, is expecting to move to a hybrid model next year, Thornton said.
She expects the festival may have small satellite events, as well as challenges for residents to create things in their own backyard or driveway, she said.
“The concept is ‘How do we inspire people from all different neighborhoods to come and engage in some way?” she said.
She expects funding from individuals and businesses will be key in keeping the festival free.
If the city experiences a large increase in lodging and rental car tax revenue this fall, officials could accept applications in funding during January or February for events next year, Prud’homme said. But it’s far more likely the city will keep to its regular funding schedule and accept applications in the spring for 2022 events, she said.