Cortez Lodgers' Tax Increase

Since 1981 Cortez has charged a 2% lodgers' tax on stays inside city limits. The city's FAQ says it applies to short stays, typically less than 30 consecutive days, in hotels, motels, campgrounds and short-term rentals, and not to long-term rentals. Lodging providers collect it from guests and remit it. Ballot Question 2A raises the rate to 6% on January 1, 2027. As an example, at 6%, a $100 taxable lodging charge pays $6 in city lodgers' tax. Ordinance 1375, which the City Council adopted on August 11, 2026, to refer the question, calls the increase an additional permanent tax, and the question sets no end date.

The question caps the increase at $900,000 in tax collection year 2027 and allows whatever the tax generates in each year after that. The FAQ says the 2% rate has brought in an average of $250,000 a year over the past five years. City Manager Drew Sanders estimated the 6% rate could bring in $750,000 a year, The Journal reported.

The city says the rate has not changed in 45 years while costs rose, that the tax primarily falls on visitors rather than Cortez residents, and that 6% brings the city closer to a statewide average its FAQ puts at 6.7%.

The question limits the revenue to three uses: tourism marketing, including advertising the community; attracting and facilitating economic development and redevelopment of properties and infrastructure within the city, including walkability, landscaping, structures and other improvements; and arts and cultural events, programs and facilities. Today the tax pays Mesa Verde Country for tourism development services and funds the city's Business Beautification Grant, which helps businesses improve their facades by matching part of the cost. The FAQ says the grant amounts "could be substantially increased."

The FAQ says the council will make the final spending decisions in its annual budget, with recommendations from an advisory committee of city residents and business owners. Sanders told the council the wording aims to be specific enough to limit the money and broad enough to adapt, and said water infrastructure remains an eligible use. Councilor April Randle proposed committing half of the revenue to water infrastructure; the council approved the language without that change.

If voters approve, the council adopts an ordinance setting collection, enforcement, any exemptions and other details. It may adjust the rate from time to time, provided the rate does not exceed 6%. The city may collect and spend all of the tax and its earnings without limitation or condition as a voter-approved revenue change under the Taxpayer's Bill of Rights, or TABOR, or any other law.

Montezuma County Lodging Tax Question 1B would raise the county lodging tax from 2% to 5% and excludes the municipality of Cortez, which levies a separate lodging tax.