Vail Valley Partnership (VVP) opposes Colorado Senate Bill 26-116 due to its cumulative impacts on local control, the tourism economy, and the business climate in resort-based and rural mountain communities. While the bill contains individual provisions with merit, as introduced it creates new state-level mandates and tax burdens that conflict with VVP’s core public policy principles of local decision-making, incentive-based solutions, and a predictable, pro-business regulatory environment.

Specific Concerns

1. State Preemption of Local Lodging Tax Authority

(Section 3(6)–(7))

SB26-116 prohibits municipalities, beginning January 1, 2027, from levying any lodging-related tax unless it conforms to the state-defined municipal lodging tax structure. While existing taxes may continue, communities are barred from increasing rates, adjusting the tax base, or modifying uses without adopting the new framework.

This provision directly undermines home-rule authority and limits local governments’ ability to respond to evolving community needs. Resort communities rely on voter-approved lodging taxes that have been carefully tailored over decades to fund destination marketing, transportation, workforce housing, and public services. Freezing these tools at the state level eliminates local flexibility and runs counter to VVP’s policy priority to defend home rule authority and empower local decision-making.

2. One-Size-Fits-All Approach to Resort Communities

(Section 3)

Mountain communities operate under economic conditions fundamentally different from urban and Front Range markets, including seasonal employment, constrained land supply, and tourism-driven service demands. SB26-116 imposes a uniform statewide framework that fails to account for these differences and restricts the ability of local governments and regional partners to implement solutions that reflect geographic and economic realities.

VVP supports collaborative, regionally appropriate housing and workforce strategies—not state-mandated structures that reduce adaptability in high-cost, high-impact tourism economies.

3. Increased Property Tax Burden on Lodging Operators

(Section 4 – Valuation of Lodging Property)

SB26-116 requires assessors using the income approach to include both resort fee income and net rental income in the valuation of lodging properties. This change is likely to significantly increase assessed values and property tax liability for hotels and lodging operators.

For an industry already facing rising insurance costs, labor shortages, and infrastructure demands, this provision increases operating costs without a corresponding reinvestment guarantee. The result is upward pressure on room rates, reduced reinvestment capacity, and potential impacts on competitiveness—contrary to VVP’s Business Climate & Regulatory Reform priorities.

4. Compounding Cost Pressures on Tourism-Dependent Employers

Taken together, the lodging tax restructuring and valuation changes compound financial pressures on tourism and hospitality employers who form the backbone of Eagle County’s economy. These businesses support workforce housing, childcare partnerships, transit systems, and public safety services—often through existing local tax mechanisms.

Policies that increase costs while limiting local flexibility risk weakening the very economic ecosystem that funds the community services the bill seeks to support.

5. Unrelated Tax Policy Changes Bundled Into a Single Bill

SB26-116 combines lodging tax authority, property valuation changes, senior property tax benefits, and business personal property tax modifications into one bill. This structure limits the ability of stakeholders to support positive provisions without accepting unrelated and problematic changes, reducing transparency and collaborative problem-solving.

Conclusion

Vail Valley Partnership supports voter-approved local funding tools, attainable housing, and investments in tourism infrastructure and public safety. However, SB26-116, as introduced, conflicts with these goals by preempting local authority, increasing tax burdens on lodging operators, and constraining the flexibility mountain communities need to remain economically resilient.

VVP urges lawmakers to oppose SB26-116 or substantially amend the bill to:

Preserve home-rule authority and local flexibility

Remove or revise the lodging property valuation mandate

Avoid compounding cost pressures on tourism-dependent communities

Separate unrelated tax policy changes into standalone legislation

Colorado’s mountain communities thrive when local leaders, employers, and residents are empowered to shape solutions that reflect their unique needs. SB26-116 moves the state away from that proven, pragmatic approach.