Manitou Springs voters weigh tax hike on tourist attractions after loss in marijuana revenue

MANITOU SPRINGS, Colo. (KRDO) – Voters in Manitou Springs will decide today whether to increase taxes on local attractions that charge admission fees – a move designed to offset revenue the city lost after Colorado Springs residents legalized recreational marijuana last year, ending Manitou’s regional monopoly.

In July, Manitou Springs officials announced that the city was facing a projected $4.3 million budget shortfall for 2026, primarily due to declining marijuana tax revenue. For years, those taxes supported local services and projects, but that revenue began to slow after Colorado Springs legalized the sale of recreational marijuana this spring.

In an effort to address that shortfall, city leaders have proposed increasing the amusement tax on ticketed attractions.

Ballot Question 2A asks residents if the city should increase its “amusement tax” from the current 5% to as much as 14%. The change would impact just a handful of local businesses, including the Pikes Peak Cog Railway, the Iron Chateau, the Manitou Springs Penny Arcade, and the Manitou Cliff Dwellings.

Here's the exact language found on the ballot:

City of Manitou Springs Ballot Issue 2A (Vote YES or NO) – SHALL CITY OF MANITOU SPRINGS' TAXES BE INCREASED BY TWO MILLION FIVE HUNDRED THOUSAND DOLLARS ($2,500,000.00) ANNUALLY IN THE FIRST FULL FISCAL YEAR COMMENCING JANUARY 1, 2026, AND BY SUCH AMOUNTS AS ARE RAISED ANNUALLY THEREAFTER BY ADDING AN ADDITIONAL NINE PERCENT (9%) TO THE CITY'S CURRENT FIVE PERCENT (5%) EXCISE TAX RATE ON TICKET SALES AND ADMISSIONS FEES, AND SHALL THE RATE OF SUCH TAX BE ALLOWED TO BE DECREASED OR INCREASED BY THE MANITOU SPRINGS CITY COUNCIL WITHOUT FURTHER VOTER APPROVAL SO LONG AS THE RATE OF THE TAX DOES NOT EXCEED 14%, AND WITH THE RESULTING TAX REVENUE BEING ALLOWED TO BE COLLECTED AND SPENT BY THE CITY WITHOUT REGARD TO ANY EXPENDITURE, REVENUE-RAISING, OR OTHER LIMITATION CONTAINED IN ARTICLE X, § 20 OF THE COLORADO CONSTITUTION OR ANY OTHER LAW?

The mayor of Manitou Springs, John Graham, says that the proposed amusement tax aims to lean more on tourists to fill the budget gap, instead of hitting residents directly.

"The tax would be paid by primarily tourists, by the people who go there, so essentially that moves the tax burden off of the visitors," Graham said. "And we feel there's sufficiently inelastic demand there, to where that has a chance of prevailing."

Graham says the proposed amusement tax is just part of a two-pronged approach to address the budget shortfall. The city is also redirecting parking revenue to help cover costs, aiming to avoid high increases to property or sales taxes for residents.

You can find the full El Paso County ballot here. Though the deadline to mail in your ballot has passed, there's still time to drop off your ballot in person at a dropbox or polling center. Ballots are due by tonight, Nov. 4.

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