When a majority of Telluride Town Council voted last year to keep a tax on short-term rentals (STR) off the ballot, a group of citizens took matters into their own hands.
Pepper Raper, Elena Levin and Hayley Nenadal, believing that the prevalence of STRs were negatively impacting the housing market for working locals, mobilized this year to collect the required number of signatures to put a citizen’s initiative on the ballot. The trio was successful, paving the way for a resulting ballot measure that will ask Telluride voters to weigh in on a proposed 2.5 percent excise tax on STRs. Proceeds from collected taxes would go into town’s affordable housing fund.
At Tuesday’s Town Council meeting, council was tasked with choosing between two options: to adopt an ordinance that would place the question on the ballot and into town law, or to pass a resolution that would just place the question on the ballot without creating a new law. While Telluride’s Home Rule Charter gives council the authority to “change detailed language and to affix the title thereto, so long as the substantive provisions are not materially altered,” council did not discuss any changes.
Enacting an ordinance would require a two-step process. Given the compressed timeframe between Tuesday and Election Day Nov. 5 — “Eighty-one days,” said Town Attorney Kevin Geiger — and the impending September deadline to submit ballot language to the San Miguel County Clerk’s Office, council opted to simply place the initiative on the ballot so they wouldn’t have to call a special meeting to vote on the second reading required of the ordinance. Either way, because of TABOR requirements, Geiger said, the citizen-initiated ordinance was going to the ballot. Had council opted to pass an ordinance and the voters subsequently turn down the tax, Geiger explained that would be somewhat complicated.
“That would be a weird situation,” he said.
Council heard spirited comments from the public before voting on the resolution.
Local Realtor and property manager Rosie Cusack protested the initiative.
“These thoughtless proposals are incredibly annoying,” she said. “Don’t piss people off who want to come to Telluride.”
Raper — one of the petitioners — defended the excise tax, noting that it would provide a revenue stream for the affordable housing fund and would open up more in-town housing for locals.
“A vote for affordable housing is a vote for the economy,” she said. “We want a workforce that can be here on time.”
She said workers living out of town, especially during last winter’s snowy conditions, were often unable to make it to work on time.
Co-petitioner and owner of Ghost Town coffee shop and grocery, Elena Levin, told council that three of her employees lived in their cars, and that finding people to consistently staff her business left her pondering drastic decisions.
“I’ve had to consider closing on peak weekends (like Bluegrass) because I don’t have enough employees,” she said.
And, she added, “A 2.5 percent tax is just a small part of the solution to affordable housing.”
Though powerless to change the citizen-initiated ordinance’s path to the ballot, on Tuesday the tax was met with resistance from many of the same people who protested it when council was considering a similar tax last year. Before last year’s election, council voted down sending a STR tax to the voter 5-2 (council people DeLanie Young and Geneva Shaunette were in favor of the tax). Voters eventually rejected a sales tax measure placed on the ballot, but approved a bond issue to bolster affordable housing reserves.
Stacey Ticsay told council she had built a cleaning business that primarily served short-term rentals.
“I’m able to pay my mortgage because of Airbnbs,” she said. “They fill a niche in our economy. They attract price-sensitive visitors.”
Ticsay also cautioned, “you have to understand the unintended consequences.” She expressed concern that the tax would prove impactful and lead to loss of jobs.
Co-petitioner Nenadal sought to assure council and the public that “the tax is not anything really crazy.”
The Telluride Tourism Board’s Michael Martelon asked council to heed the words of Telski CEO Bill Jensen, who spoke against an STR tax last year.
“I’d like to ask those five council members who understood a year ago today to heed the words of Bill Jensen, ‘be careful of the unintended consequences,’ and ask you to collaborate with the lodging community to create an educational effort in support of defeating this effort and how to best approach the availability and accessibility to deed restricted housing,” Martelon said.
Martelon also spoke to how the excise tax would create an “us versus them” dynamic.
“And, I hope all of you understand that your decisions, although Telluride-focused, have an impact across the entire Western Slope,” he said. “The simple electorate arithmetic here provides a wonderful soapbox for emotional matters — an us versus them approach, targeting 14 percent of our GDP, although wonderfully Telluride, is not logical.”
Some members of council were visibly uncomfortable voting on the resolution. The resolution reads in part: “Resolution of the Town Council … submitting to the electorate … a citizen-initiated ordinance authorizing the Town of Telluride to increase taxes in 2020 by levying an additional excise tax of 2.5 percent on the amount charged to any person leasing a short-term rental unit for the purpose of funding affordable housing and affordable housing programs.”
The resolution passed unanimously. Since there is already a regular municipal election scheduled, the ballot question incurs no additional costs to the town.