Three proposed tax increases will appear on Montezuma County ballots this fall, but they involve different jurisdictions, types of purchases and aims for spending the prospective funds.
A fourth tax change - the Cortez sales-tax holiday beginning October 18th - has already been enacted by the City Council and is not subject to the November vote.Here is a basic way to tell them apart:
- Mancos Ballot Question 2B would increase the town’s sales tax from 4% to 4.4% for streets and broadband.
- Cortez Ballot Question 2A would raise the city’s lodgers tax from 2% to 6% for tourism, economic development and cultural features.
- Montezuma County Ballot Question 1B would raise the county’s lodging tax from 2% to 5%, this would only apply in unincorporated Montezuma County.
- The Cortez sales-tax holiday will temporarily eliminate the city’s 3.85% sales tax from October 18 through December 31. It is already scheduled to happen, and is not tied to a vote in November.
Mancos Question 2B: A general sales tax for streets and broadband
Mancos voters will decide whether to add 0.4% to the town’s sales tax, raising the rate from 4% beginning January 1, 2027.
Unlike the two lodging-tax measures, the Mancos proposal would apply to taxable retail sales throughout the town. On a $100 taxable purchase, the increase would add 40 cents in town sales tax.
The town estimates the increase would generate $325,000 during its first full year, according to a press release announcing the question. The ballot language restricts the money to street improvements, broadband capital improvements and related equipment, operations and maintenance.
The measure is not intended to sunset in the future.
Mancos voters will also see the Montezuma County lodging-tax question on their ballots. They apply to different transactions and would fund different activities.
Cortez Question 2A: Raising the city lodgers tax from 2% to 6%
Cortez voters will decide whether to raise the city’s tax on hotels, motels and short-term rentals from 2% to 6% on January 1, 2027.
On a $100 lodging charge, the city lodgers tax would rise from $2 to $6 - an additional $4 before other applicable taxes and fees.
The ballot authorizes the city to use the revenue for three general purposes: tourism marketing, economic development and redevelopment; improvements such as walkability, landscaping and other curbside features; and arts and cultural events, programs and facilities.
The ballot states that the tax increase could generate up to $900,000 in 2027. It also authorizes future city councils to adjust the rate without another election, as long as it does not exceed a maximum of 6%.
At the first in a series of public forums, City Manager Drew Sanders said Cortez currently collects about a quarter of a million dollars annually from its 2% lodgers tax.
An advisory committee would develop recommendations, with the City Council ultimately deciding how to spend those funds through the annual budget process.
Forum participants repeatedly asked how specifically the money would be allocated and how residents could track it. Some argued that the city needs flexibility as community needs change. Others worried that broadly written categories could allow money to be redirected toward projects voters did not anticipate.
Sanders characterized the measure as “broad enough to let them do their jobs” but “narrow enough to have some guardrails.”
Sanders also said the city plans to create an online public dashboard showing how the lodgers-tax money is spent, possibly including descriptions and photographs of completed projects.
County Question 1B: A separate lodging tax outside Cortez
Montezuma County’s lodging-tax proposal is separate from the Cortez measure.
County Question 1B would raise the county lodging-tax rate from 2% to 5% beginning January 1, 2027. The final ballot language expressly excludes Cortez, which administers its own lodgers tax.
On a $100 lodging charge subject to the county tax, the increase would add $3, raising the county lodging tax from $2 to $5.
The county estimates the increase would generate an additional $404,598 during the first collection year.
The county measure authorizes the money for some areas also touched on by the Cortez tax:
- Tourism promotion and marketing;
- Recreation, outdoor recreation and visitor-related infrastructure;
- Destination-development projects and visitor-experience improvements;
- Tourism resilience and emergency response or recovery following events that affect visitation; and
- Administration, oversight and implementation of lodging-tax programs.
The county’s proposal expressly mentions outdoor recreation, visitor-related infrastructure and recovery from emergencies. Cortez’s proposal places greater emphasis on economic redevelopment, walkability, landscaping, arts and cultural facilities.
Not on your ballot: Cortez’s sales-tax holiday
Cortez will temporarily stop collecting its 3.85% city sales tax beginning October 18 - as ballots arrive in mailboxes in Colorado.
The sales-tax holiday is already approved by the city council. It does not depend on the outcome of the November election and is unrelated to the proposed increase in the city lodgers tax.
The holiday is intended to return revenue after Cortez collected more recreation sales-tax money than allowed between 2021 and 2025. From October 18 through December 31, the city portion of the sales tax will fall to zero.
State and county sales taxes will remain the same. According to the city, the combined rate on affected purchases will temporarily decrease from 7.69% to 3.84%.
The city’s separate 2% lodgers tax will remain in place during the holiday, which ends on December 31st.
On January 1, 2027, the Cortez city sales-tax rate will return to 3.85%. Any local tax increases approved by voters are also scheduled to go into effect.
The bottom line
The ballot measures affect different people, purchases and jurisdictions across Montezuma County.
The Mancos measure is a general sales-tax increase intended to improve and maintain streets and broadband. The Cortez and Montezuma County proposals apply only to lodging.
The Cortez sales-tax holiday is neither a proposal or ballot question. It is a temporary, previously-approved reduction intended to return previously overcollected revenue.
Voters should check their own ballots carefully, because the local questions they receive will depend on their voter jurisdiction.
