Custer County, Colorado
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Custer County Colorado's Community Information Hub purposes to provide straight-up, factual information about local initiatives supported by peer-reviewed research and free from "hidden" influences of opinion, bias, or political ideology, so that County residents can make informed decisions.
Lodging Tax Ballot Measure 1A increases Custer County's lodging tax rate from the current rate of 2% to 6% with the generated revenues going towards promoting tourism in the County and childcare and housing projects for working people who serve our community.
For generations secure, affordable housing was the foundation of the “American Dream”. Inflation, rising interest rates, supply chain disruptions, and housing shortages have all contributed to the rising cost to build and purchase housing. Renters at all income levels have experienced significant rising of rates over the last two decades. People who work in our community can no longer afford to live in the community in which they serve and are often forced to endure an hour or more commutes or live in overcrowded and undesirable conditions. An unstable housing environment has a direct negative impact on workers and, hence, businesses who are unable to attract, hire and keep staff.
Childcare isn't just a family issue, it's a community and business issue. The majority of businesses in Custer County depend on child care for at least one employee and usually more. Employers and managers face ongoing hiring challenges linked to child care accessibility, and some lose employees due to insufficient child care capacity and unaffordability. These problems are economically detrimental to our workers, businesses, and community overall.
Premier hiking and climbing, hunting, fishing, wildlife viewing, and stunning scenery are just a few of the natural assets that draw outdoor enthusiasts to Custer County. Music and art festivals, the Stampede Rodeo and County Fair, Dark Skies events, and the High Altitude Horsepower Car Show are among the numerous events that bring visitors to the Wet Mountain Valley and Sangre de Cristo mountain range. Tourism is a rapidly growing industry in Custer County. But visitors have an impact on our community. A positive impact in that they fuel our community's economy, but also a negative impact in that they put a strain on local resources and pose risks to our fragile environment and unique western culture. The need to provide a reliable infrastructure and services to the visitation economy, as well as ensure our natural resources are protected, requires a sustainable workforce.
Proposed Lodging Tax Increase
Lodging Tax Ballot Measure 1A
In May 2025 Colorado State legislators passed House Bill 25-1247 that gives counties the option to put forth a ballot initiative within their jurisdiction allowing an increase in lodging taxes imposed on temporary lodging facilities within their jurisdictions from 2% to a maximum of 6%. The law states that the revenues collected can only be used for the following purposes:
1. Housing and childcare for the tourism-related workforce, including seasonal workers, and for other workers in the community;
2. Public infrastructure maintenance or improvements: and/or
3. Enhancing public safety measures by funding local law enforcement, fire protection services, and emergency medical services.
On July 30, the Custer County Board of Commissioners voted unanimously for a ballot initiative to increase Custer County's lodging tax from 2% to 6% with the collected revenue to be spent on continuing to promote tourism to Custer County and developing affordable housing, and child care services for the County's resident workforce.
What is a lodging tax?
A lodging tax, also referred to as an occupancy tax or hotel-motel tax, is imposed by local governments (county, city, state) on temporary accommodations such as hotel/motel rooms, AirBnBs, VRBOs, and other short-term rentals. A short-term rental is anything less than 30 days.
The lodging tax is calculated as a percentage of the cost of the guest’s stay and added to the price of the bill.
The guest pays the tax, and the lodging owner/manager is responsible for collecting and paying it to the proper tax authority.
The lodging tax is not an income or property tax on the County's residents. It is a tax paid by guests renting short-term lodging.
How much will the tax be?
Currently, Custer County assesses a 2% tax on all short-term rentals with revenues solely dedicated to promote and market tourism for the benefit of Custer County. The ballot initiative proposes to increase the lodging tax to a total of 6%, with the additional 4% supporting affordable child care and housing for the County's resident workforce.
Who pays the lodging tax?
Visitors or guests who use short-term rental properties located within Custer County will pay the the proposed tax. The only way a resident would pay the tax is if they stayed in one of these properties. It will not increase property taxes. It’s like a fee. Fees are only paid by those who use the amenities.
What will the proposed lodging tax pay for?
2% of the collected revenue will continue to be spent on promoting tourism, 2% will go towards developing workforce housing, and 2% will go towards providing quality child care options for the people who work and live in Custer County.
An Assessment of the Potential Impact of Lodging Taxes on Custer County Tourism (link forthcoming)
Discussion Paper by Kevin Rhodes
October 13, 2025
Lodging Tax Amounts Based on Per Night Rates
(Current lodging tax rate of 2% and proposed lodging tax increase of 4% including Colorado State, Silver Cliff & Westcliffe sales and use taxes and Custer County lodging tax)
Lodging Tax Rates Using Various Rental Rates & Lengths of Stay (Unincorporated Custer County properties)
Child Care
According to a 2024 Council for a Strong America report, 64% of Colorado families with children ages five and under have all available parents in the workforce. And families with an infant and a four-year-old are paying on average 38% of their household income on childcare. The cost of child care can be a significant financial burden on parents, and the challenge of finding safe, quality child care is even more burdensome. Our child care system is currently too costly for parents, and yet, in Custer County the true cost of care is subsidized by the low wages provided to those providing child care.
Research demonstrates that high-quality child care options not only improve socio-economic, health, and academic outcomes in children, but also positively impacts parents, businesses, and the community as a whole. Access to quality child care makes it possible for parents to work, expanding the local workforce and allowing for higher earnings in the long term. Reduced access to child care leads to loss of earnings for parents, lost revenues for businesses due to increased employee absenteeism and decreased productivity, and lost tax revenue for the local economy.
There are over 270 children under the age of 5 in the County, yet there are only 38 full-day child care slots available in the Custer County's Early Childhood Education Center County. The Center was purchased with grant funds generously donated by The Buell Foundation and the Ezulwini Foundation. Currently, there is a waitlist for children ages 3 - 5 at the Center, and there is only one licensed in-home child care provider in the County. Neither the Center or the in-home child care provider offer child care on Fridays and the Center is closed June, July, and half of August every year.
Custer County Childcare Center charges $760 per month for one child in full-time child care, or $8,640 annually, for full-time child care. This is $300 less per month than the State average. For a single person making $43,700 per year, that's 20% of their gross pay. For a family of four with both parents working, two children under the age of 5 needing child care, and an household income of $72,900, the child care cost would be around 23% of their annual gross pay.
Add housing and utility costs to the above scenerios and a single parent renting a studio apartment in Custer County, will see a minimum of 55% of their gross pay going towards housing and childcare costs. For a family of four renting a 2-bedroom home or apartment, housing and childcare costs are at minimum 58% of their gross monthly pay.
Increasing the lodging tax would provide a funding stream to provide child care on Fridays and throughout the summer, expand child care resources in our community by helping to fund potential in-home providers for training and start-up costs, and help subsidize child care of low- to mid-income families.
Lodging Taxes in Colorado: A Tool for Community Investment
Buell Foundation
September 17, 2025
Rural Homes and Bright Futures Video
In Ouray, Colorado, Rural Homes and Bright Futures is breaking new ground by combining affordable housing with in-home child care to tackle two major challenges facing families in rural communities today. This innovative model links homeownership with child care entrepreneurship, supporting providers while strengthening entire communities. Executives Partnering to Invest In Children (EPIC) is proud to recognize Rural Homes and Bright Futures as the 2025 Early Childhood Champion Award recipients.
7 Colorado counties plan to ask voters to double or triple lodging taxes to pay for roads, police
Colorado Sun
September 15, 2025
Colorado voters: Child care funding measures could be coming to a ballot near you
Ann Schimke, Chalkbeat Colorado
What’s Working: Ballot measures in three locations could help rural women bring home the bacon
Tracy Ross, Colorado Sun
October 19,2024
Voters in rural Colorado will consider measures to levy lodging taxes for child care to help working families.
Workforce Housing
For generations secure, affordable housing was the foundation of the “American Dream”. Inflation, rising interest rates, increased local property values,, and housing shortages have all contributed to the rising cost to build and purchase housing. Renters at all income levels have experienced rising rates over the last two decades.
Affordable workforce housing is an integral component to strong towns and municipalities. Lack of affordable, safe housing forces essential workers to either live outside of the community in which they work, leading to long commutes or living in overcrowded, substandard situations. Lack of affordable housing also contributes to a child's ability to succeed in school, a senior's ability to find in-home health care, and businesses ability to attract and retain staff., among other things.
Housing is considered affordable if the monthly mortgage or rent and utilities is 30% or less of the total household income, A household is considered financially stressed if more than 30% of the household income is spent on a mortgage or rent.
The Area Median Income (AMI) is the midpoint of a region’s income distribution, meaning that half of the households in a
region earn more than the median and half earn less than the median. Communities rely on these metrics to determine how well proposals align with local needs for workforce housing. The AMI that the proposed County’s housing needs to cover would be between 30% and 80% AMI (Annual Incomes between $21,420 - $57,120), which represents most of the County’s workforce.
Source: Humanizing Data, Camoin Associates, March 2023
Who are the People that Make-Up Custer County’s Workforce?
Most local employers struggle to recruit and retain a workforce due in large part to the lack of available housing for rent or purchase. Essential workforce to our County’s economic success include those who teach the children in our community, Certified Nursing Assistants, EMTs, and other medical personal who provide health care and take care of the elderly and disabled, drivers who clear our roads of snow, police and firefighters, mechanics, bank clerks, utility workers, retail staff, grocery store workers, restaurant cook and wait staff and many more who serve us in the community in “invisible” ways.
Custer County Wage Data
Colorado Financing and Housing Authority's (CFHA) Area Median Income (AMI) for 2025 is $71,400 (100% AMI) for a single householder and $102,00 (100% AMI) for a family of four. A single householder earning less than $57,120 (80% of AMI) a year would be considered low income and less than $35,700 (50% AMI) very low income. A family of four with an annual household income of less than $81,600 (80% AMI) is considered low income and less than $51,000 (50% AMI) very low income.
For many working in Custer County, the typical wage is $17 per hour, or $35,000 annually (53% AMI) for fulltime (40 hrs/wk), year around employment. But few of those employees are given fulltime work and benefits, which means their annual wage is around $21,000 (30% AMI)—much less if the work is seasonal.
According to the August 2025 Housing Needs Assessment (HNA) report, half of Custer County's households are low income and cost-burdened, meaning they spend 30% or more of their annual income on housing. Further key findings from the report indicate an existing shortage of 68 housing units in Custer County, including about 45 ownership units and 23 rental units. Ten-year projections based on 2023 forecasted household growth show a need for 343 housing units in Custer County by 2033, 104 units in Silver Cliff, and 137 units in Westcliffe. Further additional adjustments to future housing needs in all three jurisdictions suggest as many as 664 additional units are needed in Custer County to meet housing needs identified through additional analysis.
The Village at Silver Cliff
Custer County, in collaboration with the Town of Silver Cliff, proposes to develop approximately 1.5 acres owned by the County for workforce housing.
Westcliffe Workforce Housing Site
The Town of Westcliffe proposes to develop approximately a 1.5 acre lot with four 5-plexs consisting of 1 and 2 bedroom dwellings. Westcliffe was recently awarded a grant by the State of Colorado to bring sewer and water to the site.
Revenues from the proposed lodging tax increase will go towards supporting future housing needs and data analysis; maintaining funds for grants that require matching funds and for preapplication expenses, such as land analysis reports and environmental impact reports; providing gap financing for new construction or acquisition and rehabilitation projects that wouldn't be financially viable otherwise; maintaining funds to support workforce housing and associated infrastructure costs, such as street improvements; operating costs for workforce housing developments to cover ongoing expenses, such as utilities, repair and maintenance, and other property management costs.
Tourism
Impact of Lodging Taxes on Tourism
Increasing lodging tax rates by 4%
will have little to no impact on tourism.
Higher rates are common in other Colorado rural counties. The majority of comparable rural mountain counties are currently in the 4–5% range., and most of these counties are seeking to increase their lodging tax rate to 6%. Chaffee, Custer, Gilpin, Ouray, Park, and Routt counties are asking voters to approve a 6% lodging tax; Eagle county is proposing a 4% lodging tax.
Tourism is resilient. None of the counties that adopted higher rates have experienced a reduction in tourism. Chaffee, Gunnison, and Archuleta in particular continue to attract visitors at increasing rates.
Revenue impact is substantial. Lodging taxes in peer counties generate hundreds of thousands of dollars annually—compared to Custer County's total 2024 lodging tax revenue of $90,577. Revenues in neighboring counties fund tourism marketing, events, visitors' services, road and bridge upkeep, and workforce housing and child care initiatives.
Destination value outweighs marginal price differences. Lodging tax differentials of a few percentage points rarely change destination choice (Bonham, et. al, 1992). Visitors choose counties for their place-specific natural amenities, festivals, and other unique offerings. Counties with higher lodging tax rates than Custer County continue to attract strong overnight visitation. Similarly, statewide data from the Colorado Department of Revenue show no consistent pattern linking higher lodging taxes to lower tourism receipts.
Tourism Industry Contributes $28.5 Billion to Colorado Economy and Supports Over 188,000 Jobs
Colorado Office of Economic Development and International Trade
July 29, 2025
Tourism and Lodging Tax White Paper
Kevin Rhodes
October 13, 2025
An assessment of the potential impact of an increase in Lodging Taxes from 2% to 6%. on overnight tourism in Custer County.
The Economic Impact of Travel in Colorado
Colorado Tourism Office
June 2025
County Specific Dashboard (interactive)
The Dean Runyan Associates report provides insights into the economic impact of the tourism industry in Colorado. Information is available related to travel spending, tourism-related employment, and state and local tax revenue. The information is provided for the state, the travel regions, and the 64 Colorado counties.
Recreation, Tourism, and Rural Well-Being
Richard J. Reeder and Dennis M. Brown
A report for the Economic Research Service
August 2005
The promotion of recreation and tourism has been both praised and criticized as a rural development strategy. This study uses regression analysis to assess the effect of recreation and tourism development on socioeconomic conditions in rural recreation counties. The findings imply that recreation and tourism development contributes to rural well-being, increasing local employment, wage levels,
and income, reducing poverty, and improving education and health. But recreation and tourism development is not without drawbacks, including higher housing costs. Local effects also vary significantly, depending on the type of
recreation area.
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