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This election season, eight Colorado communities will ask voters to consider new taxes that could be used to support child care efforts.
The ballot measures, most in mountain resort areas, represent a record number of local pitches for money to bolster a notoriously low-margin sector and help working families who struggle to find child care or cover the cost of tuition.
Five communities — Chaffee, Custer, Eagle, Gilpin, and Hinsdale counties — are asking voters to approve lodging tax increases, with child care efforts one of several potential uses for the new funding. Ouray County is asking voters to pass a new lodging tax. A state law passed last spring that increased the maximum lodging tax counties can levy from 2% to 6% helped fuel the flurry of requests this year.
Two other ballot questions — in Larimer County and a region made up of Pitkin and Garfield counties and a corner of Eagle County — ask voters for .25% sales taxes. The levies, which would not apply to food, gas, diapers, or prescription drugs, would produce millions of dollars in annual revenue exclusively for early childhood initiatives.
There’s organized opposition to the ballot measure in Chaffee County, where critics say the lodging tax increase would drive tourists to other destinations and hurt local businesses. Most of the other counties with tax measures that could send money to child care don’t have organized opposition groups. Still, some residents and lodging providers have objected to the new taxes for reasons similar to those in Chaffee County. In addition, they say counties should focus on core services and make do with the tax money they’re already collecting.
The measure in Pitkin, Garfield, and Eagle counties is particularly notable because it would create Colorado’s first early childhood development special district, a region with taxing authority enabled by a 2019 state law. The idea is that multiple communities or counties can band together and ask voters within their boundaries to levy taxes for early childhood efforts.
Maggie Tiscornia, outreach director for the ballot campaign, said, “It would just be not only a first in the state, but really a first locally as well to have something truly regional.”
The new early childhood district would stretch from Aspen to Parachute, reflecting “how our community operates in our economic corridor and how our families move across jurisdictions,” she said.
The new funding — about $10 million a year — would boost wages for child care staff, provide tuition subsidies to families, and award grants to providers to expand or improve their space.
The sales tax measure in Larimer would generate nearly $29 million. Some of the money would be used for sliding-scale child care subsidies, with every family eligible for some help, said Christina Taylor, CEO of the Early Childhood Council of Larimer County.
Another chunk of the money would be used for quarterly wage subsidies for child care employees, many of whom earn $16 to $19 an hour. A smaller amount would help providers upgrade or expand their facilities.
Taylor said there’s no guarantee the sales tax will pass, but previous polling shows “a narrow path to victory.”
If that happens, she said, “I’ll make a huge dent in a very big problem.”
Lodging taxes a boon in mountain resort areas
Especially in Colorado’s tourist destinations, lodging taxes are an appealing way to generate funding because they generally apply to out-of-town visitors staying at hotels or short-term rentals, not locals.
Such taxes became even more versatile in 2022, when state lawmakers expanded allowable uses for lodging tax proceeds to include housing and child care among other things. The idea is that local workers power the tourism industry, so visitors should contribute to efforts that support a stable workforce.
About a dozen Colorado cities, counties, or local marketing districts — from Estes Park in northern Colorado to La Plata County in southwestern Colorado — already have lodging taxes that allow some proceeds to be used for early childhood purposes. Lodging taxes don’t typically raise huge sums but advocates say they can help with local needs at a time when federal and state funding is receding.
Stacy Terrill, who leads Custer County’s early childhood council, said the county has only two licensed child care providers: a home-based business and a center run by the school district. Both facilities are closed on Friday and the school district doesn’t operate during the summer.
She said she’s heard parents say, “It’s not worth me trying to find a job” because child care is expensive and hard to find.
If the county’s lodging tax passes, it would bring in around $90,000 a year for child care, which Terrill said could be used to help offer Friday and summer care, and to train new child care workers to cover those times.
Some communities with proposed lodging taxes say the money would help with the cost of building new child care facilities, maintaining existing ones, or providing local matching funds required for certain kinds of grants.
Jake Niece, who spoke in his personal capacity not in his role as a Ouray County commissioner, said feedback from the community indicated little interest in using local taxes to cover day-to-day child care operations, but a willingness to use some for capital costs.
If passed, most of the county’s new 6% lodging tax would probably go first to emergency medical services, but some could eventually be earmarked for child care, he said. Like most of the lodging taxes on the ballot, Ouray County’s new 6% levy wouldn’t apply to municipalities in the county, only to unincorporated areas.
Niece, who expects the lodging tax vote to be close, said the shortage of both child care and affordable housing can make it hard for young families to stay in the county of about 5,000 people.
“We lose good people from our community,” he said.
Jace Hochwalt, community development director for the City of Montrose, which passed a lodging tax increase last year, knows the feeling.
Just after he and his wife moved to Montrose from Grand Junction three years ago, they discovered they were expecting their first baby.
“It was like an ‘oh no’ moment,” he said. “We contemplated moving back, frankly.”
They weren’t sure they could find a child care spot for their baby in Montrose, whereas Grand Junction was just finishing a child care center with seats for the children of city staff and community members.
Hochwalt and his wife, who are now expecting their second child, ended up staying in Montrose, and today the city is working on converting an old school district building to a child care center.
About $150,000 collected from the lodging tax approved in 2024 will be used for the $850,000 renovation.
Hochwalt said they’ll send their new baby to the center when it opens next spring and their older son after he finishes the school year with his current provider.
Once the new center is done, other local child care providers will be able to access some of the lodging tax money for help with costly improvements like HVAC or roof repairs, he said.
“Those are big ticket items,” he said. “I think it certainly helps the bottom line for [child care providers] to just continue to be able to stay in business.”
Ann Schimke is a senior reporter at Chalkbeat, covering early childhood issues and early literacy. Contact Ann at aschimke@chalkbeat.org.
