STEAMBOAT SPRINGS — In an effort to provide more sustainable funding to Steamboat Springs Transit, Steamboat Springs City Council will discuss a potential lift tax on Steamboat Resort at its Tuesday meeting.

Tuesday will be the start of discussion, so many details have not been worked out yet, but city staff is recommending a 4% tax on lift tickets, which would generate about $1.8 million each year.

“It falls in line with our fiscal sustainability goal of some revenue diversification as well as our escalating operational costs,” city Finance Director Kim Weber said Thursday. “It’s a hard case to make to say that a small tax on a lift ticket that is now running around $200 would deter someone from paying for a ticket.”

Steamboat Ski & Resort Corp., which has some businesses technically not within city limits, currently has an agreement with the city where it pays a 4.5% tax on items sold outside city limits. That amount is equal to what businesses inside city limits pay in sales tax. If this tax were passed, Ski Corp. would no longer pay that.

Weber and City Manager Gary Suiter said the potential lift tax has several pros and cons. The pros include shifting a portion of tax burdens from locals to visitors and providing a permanent funding source for transit, which council has discussed for months.

The cons include raising the prices of lift tickets, relying on outside factors such as low snow, economic crises or a pandemic and potentially hurting the city’s relationship with Ski Corp.

Weber also said, as more Steamboat visitors buy a season pass or an Ikon Pass, taxing single-day lift tickets may not bring in as much revenue as the city hopes.

“The thing that is really difficult is the creative measures that have been taking place on how you get a pass,” Weber said.

Aspen, Breckenridge, Vail and Winter Park already have similar measures in place, and Suiter said a survey from the Colorado Association of Ski Towns found those ski area operators were supportive of the measures.

“Ski Corp. has indicated support if we can agree to services and programs that enhance the ski area operation and the guest experience for the long-term,” Suiter said in a written report to council. “Staff believes there will be multiple opportunities to negotiate further with Ski Corp.”

Discussions on long-term transit funding kicked up earlier in the year, as Ski Corp. backed out of their original verbal commitment to fund the city’s Blue Line. Loryn Duke, Ski Corp. director of communications, said their decision came as the resort’s visitorship dropped 30% due to COVID-19.

“I think we need to try and find a solution that works for both groups,” Suiter told council in a January meeting.

Ski Corp. President and COO Rob Perlman told council that Ski Corp. is not opposed to a lift tax. Suiter said he expects Perlman will attend the Tuesday meeting for further discussion.

Suiter and Weber are also recommending council wait to put a lift tax on the 2022 ballot, as such a decision would need to be approved by voters, but council is already deep in discussions about putting a property tax on the 2021 ballot.

“A lift tax would very likely undermine any chances of the electorate approving a property tax,” Suiter wrote in the report.

Council and staff felt Ski Corp. should play a part in funding Steamboat’s transit because many resort employees and visitors rely on city buses to reach the ski area.

“Ski Corp. doesn’t always seem to realize that their employees are largely transit dependent,” council member Sonja Macys told her fellow council members in a previous discussion. “They’re benefiting from the bus system, and we’ve long asked them to try to put something into it.”

While staff members are recommending a 4% tax directly to transit, council could opt for any amount used to fund any city measure.

If council went with the transit recommendation, staff said more money could help sustain the Blue Line, recruit and retain drivers and maintain fleet and facilities.

“Staff does not believe that in-town gondolas or passenger trains are financially feasible,” Suiter added in the written report.

Steamboat currently relies solely on sales tax, which the city retains due to its destination as a vacation town, but Suiter said COVID-19 has highlighted how sales tax can be unreliable and dependent on too many external factors.

Residents interested in sharing comments or concerns over a potential lift tax may share their thoughts in the city’s public comment section of their weekly meetings, which can be joined by Zoom.