Manitou Springs voters have approved Question 2A, raising the city's excise tax on attraction tickets and admissions fees as officials scramble to close a budget hole that has already forced more than $1 million in cuts. The measure adds 4.03 percentage points to the city's existing 5% tax on ticket sales and admission fees, pushing the rate to 9.03%.
Mayor Natalie Johnson is projecting the tax will bring in an additional $1.1 million a year, according to KOAA News 5. As Colorado Public Radio reported, the increase layers on top of the city's current 5% tax on ticket sales and admission fees, meaning ticket purchases in town will now be taxed at 9.03%.
Johnson framed the vote as a matter of survival for a tourist town that dwarfs its own population every year. “We live in a community of less than 5000 people and we have over 300,000 visitors a year,” she said, according to the station's report. Even with 2A's passage, Johnson said, the city still needs to trim another $400,000 from its budget on top of more than $1 million in cuts already made.
What's at Stake if Cuts Go Deeper
Johnson warned that without the new revenue, the consequences could hit services residents rely on daily. “cut an additional 1.1 million we would start losing really integral important city services like the ambulance, like our chamber of commerce, our pools,” she said, per the same account. The warning underscores how thin the margins have become for a small mountain town whose finances depend heavily on tourist spending.
The budget strain traces back to a revenue source that dried up almost overnight. The station reported that the tax is intended to offset part of the $3 million in tax revenue Manitou Springs lost after Colorado Springs approved retail marijuana sales, which had previously flowed almost exclusively to Manitou Springs dispensaries. Colorado Public Radio, however, has separately reported that reduced recreational marijuana sales accounted for roughly $4 million in lost tax revenue, with the community's 2026 general fund revenues expected to fall nearly 30 percent from the prior year — the two outlets have not reconciled the differing dollar figures.
Sales Tax Slide Even as Actual Sales Hold Steady
The marijuana falloff has rippled through the city's broader tax collections. The Gazette reported that Manitou Springs had collected 38.4% less sales tax in 2026 compared to 2025, even though actual retail sales have not collapsed nearly as sharply — April 2026 sales tax revenue ran 20% behind April 2025, while actual sales for that month were down less than 2%. The newspaper also reported that the city's amended budget included about $325,000 in cuts to city services, including fire and police.
The City of Manitou Springs' own finance office has said it made more than $1.3 million in budget reductions since 2024, though that figure is based on comparisons to initial budget requests rather than final spending, and the city has said the true 2026 budget outcome won't be known until an audit is completed in July 2027.
Business Owners Question Who Pays
Not everyone welcomed the new tax. The levy applies mostly to five businesses that cater to tourists, and some of those owners have questioned whether it's fair to lean so heavily on a small slice of the local economy, per KOAA's reporting. Greg Wellens, owner of Adventures Out West, pushed back before the election. “There's lots of options, why is it always raise the taxes,” he said.
Supporters countered that the increase simply brings ticket sales in line with how other goods are already taxed. The Gazette reported that backers argued boosting the tax rate on tickets from 5% to 9.03% would bring the rate in line with the sales taxes collected on other goods, such as the 9.03% already charged on items like t-shirts in Manitou Springs.
A Second Try After Last Year's Defeat
This is not the city's first attempt to raise the excise tax. A similar ballot issue failed last year by a margin of 56 to 44 percent, according to Colorado Public Radio's account. That earlier measure would have let the city council raise the excise tax as high as 14%, and KOAA reported at the time that about 56% of voters rejected it, leaving the city facing a major budget shortfall heading into this year's vote.
Johnson has said she believes visitors will absorb the new tax increase without much notice, given how small a share of a ticket price the added percentage represents. Still, she left room for the city to revisit the policy if it backfires. “if there is an unnecessary impact, of course we would reevaluate,” Johnson said.
