How Diverting Tourism Funds for Housing and Childcare Could Devastate Colorado’s Economy—and Why It’s a Warning to the Nation

The tourism industry in Colorado is facing a significant challenge following recent legislation (house bill 1117) that allows counties to redirect lodging tax revenues—previously dedicated to tourism promotion—toward affordable housing and childcare. While these causes are undeniably important, the law creates a difficult choice for local governments: continue to fund tourism, which plays a critical role in the economy, or shift that funding to address housing and childcare needs. One crucial issue is that Colorado counties are capped at a 2% lodger’s tax, and most are already at that limit, with all the revenue being used for tourism marketing. While the new law expands the allowable uses of these funds, it does not increase the 2% cap, forcing counties to choose between tourism and social services.