Airline subsidy is a great investment.
Steamboat Springs was the first ski community to develop a subsidized airline program to allow easier access to our guests in the winter season. This program was really what put Steamboat on the map as a destination ski resort and has been tremendously successful as well as wonderfully managed. The problem is that with the merger of the airlines, along with several other factors, the cost of these subsidies or revenue guarantees are ever increasing.
Originally the cost of this program came primarily from the Ski Corporation with assistance from the Chamber and its members. The burden of a yearly drive for these monies and the fact that the contracts for the airlines needed to be accomplished almost immediately following the ski season, this way of raising funds was too unstable. In 2004 the community passed a 2% lodging tax that provided us with a nice cushion and surplus. However the past two years have proven to be more expensive and the reserves have been deeply cut into. This past winter saw a 27% reduction in airline seats and the economic affect was visible. Without doing anything those reserves will dry up in another two years.
This fall we have a sales tax initiative on our ballot. The sales tax would be an increase of twenty five cents (one quarter) for every one hundred dollars purchased. This initiative also has a sunset of five years. The hope being that with the increase the 27% reduction in seats could be reversed and as more seats are available meaning more people flying in meaning increased sales tax and increased lodging tax. Hopefully in five years we will have a nice reserve that will allow us to retire the sales tax. I would argue that even if that doesn’t occur the increase in sales tax is a worthwhile investment into our community.
The only argument that I have heard against the tax increase is that we are subsidizing a major corporation (Ski Corp) and that they should foot the entire bill. But is the ski area truly the only benefactors of this tax increase? How about the lodges and restaurants and the grocery stores and the ski shops and the clothing stores and the Real Estate market? All benefit from an increase in winter traffic and those that benefit should help pay. Statistics show that the airline subsidy program pays about $30.00 per passenger that flies in to the Yampa Valley Regional Airport. That passenger will spend an average of $1,100.00 during their stay in Steamboat. Hmmmm, let’s see, for a $30.00 investment we receive a $1,100.00 return. I would call that a pretty good return on investment. I wish I could get the same on my stocks and bonds.
This is an issue that will greatly benefit all that live in the community and not just those who have a direct tie to the winter ski season. The City could see an increase in tax revenue with more people flying in allowing them to maintain the beautiful parks and trail system that we all enjoy. Businesses in this community are hit hard with requests for donations for worthwhile projects and non profits and a healthy business community means more support for these projects.
We have also improved the airport to the tune of around thirty million dollars over the past decade and now have a comfortable functional facility that can easily handle the increased flight loads. It is why Buyer’s Resource and its Agents have contributed time and money to support this initiative. We hope you agree and support 2B on this falls ballot.