Counties and municipalities across Colorado are facing revenue shortfalls, and some are seeking to generate additional funds through tax increases that could impact businesses. In Southern Colorado, Manitou Springs and Cañon City have measures on their Nov. 4 ballots asking voters to approve excise tax boosts on tourist attractions, while in Pueblo, voters are being asked to OK a 1% increase in the city’s sales and use tax to address a budget deficit.
In addition, Chaffee and Custer counties want to increase their local lodging taxes to the statutory maximum and use the proceeds to fund projects outside of the traditional expenditures on tourism promotion. Here’s a rundown on these measures.
Manitou Springs Ballot Issue 2A
Seeks to increase the current 5% excise tax on ticket sales and amusements to 14% in 2026 to compensate for sales tax revenue the city lost when Colorado Springs approved recreational marijuana sales. The measure asks voters to allow City Council to adjust the excise tax in subsequent years, without further voter approval, up to a maximum of 14%. The increase is projected to raise $2.5 million in 2026. Proponents say the additional revenue is needed to avoid service cutbacks and will be paid primarily by tourists. Opponents state that the tax burden would fall on six local businesses, including the Broadmoor Manitou and Pikes Peak Cog Railway and the Iron Springs Chateau dinner theater, and would be the highest in the state, potentially discouraging tourism.
Cañon City Ballot Issue 2B
Would impose a new 2.25% excise tax on amusements, scenic rides, recreational excursions and attractions, affecting businesses such as the Royal Gorge Route Railroad and the area’s river rafting outfits. Revenue estimated at $675,000 annually would support operational costs for the city’s RC Icabone community pool, which is currently in the design phase. The original pool, built in 1966, closed in 2023 because of multiple structural and mechanical issues.
In 2024, Cañon City voters approved a 0.3% sales tax increase and a bond issue to fund construction of a new pool, but rejected a property tax increase to support its operations. Proponents say that passing the excise tax would ensure that the new facility can be built and that the tax targets tourists. Opponents say increased costs of tickets and admission fees would negatively impact local businesses and could impact tourism overall.
Pueblo Ballot Question 2A
Seeks voter approval for a 1% increase on sales and use tax to address a significant and growing budget deficit projected to be as much as $12 million. If passed, the increase from 3.7% to 4.7% would generate more than $26 million annually, according to city estimates. Proponents say the revenue is necessary to fund crucial city services including infrastructure projects and public safety; Mayor Heather Graham has noted that the tax has not been increased in 50 years. Opponents say the tax increase would be regressive, hitting hardest on low-income residents.
Lodging Tax Increases
Seven Colorado counties, including two in Southern Colorado, are asking voters to approve increases in lodging taxes on hotels, motels and short-term rentals in their jurisdictions. These tax revenues traditionally have been used to fund tourism marketing, but the state Legislature passed bills in 2022 and 2025 raising the maximum allowable rate for such taxes from 2% to 6% and expanding the uses for which that revenue could be spent. In Southern Colorado:
Chaffee County Ballot Measure 1A
Asks voters to increase the local lodging tax by 4%. The increase would apply to the towns of Buena Vista, Poncha Springs and Salida as well as countywide. The current 1.9% tax, originally levied 35 years ago, supports local tourism marketing, and since 2023, 60% of the revenue has been used for investments in affordable housing, early childhood education and childcare workforce development.
The ballot measure also asks voters to allow additional uses of the revenue, including infrastructure maintenance or improvements and public safety needs, and spells out how the additional revenue would be distributed. According to the county, the lodging tax currently generates about $1.2 million annually. If the increase passes, it is projected to bolster annual revenue by $3.35 million to $3.5 million.
Custer County Ballot Issue 1A
Asks voters to raise the county’s lodging tax from 2% to 6%, which would generate approximately $170,000 in additional annual revenue. If the measure passes, 2% of total revenue would continue to be spent on tourism promotion. The additional 4% would be spent on development of workforce housing (2%) and childcare options (2%).