Shaky consumer confidence has Steamboat Springs contemplating service cuts

Forecast presented Tuesday didn’t include potential new revenue, but highlights why Council is pursuing additional funding.

Roughly 60% of Steamboat’s sales tax revenues in 2024 came from three categories: Miscellaneous retail, Lodging and Restaurants. (City of Steamboat Springs/Screenshot)

Weakening economic factors, declining consumer confidence and sluggish sales tax numbers so far in 2025 have Steamboat Springs staff recommending a 2% cut to next year’s budget, a move that would likely lead to noticeable service cuts without additional revenue.

In a presentation to Council on Tuesday, City Finance Director Kim Weber said the city is particularly susceptible to economic whims, as roughly 70% of the city’s general fund revenue comes from sales taxes. A cut of 2% represents about $800,000 in city spending.

Roughly 60% of Steamboat’s sales tax revenues come from three categories: Miscellaneous retail, Lodging and Restaurants. Weber said categories driven by tourism are flat or down when compared to last year — “Visitors are not spending as much money,” Weber said.

“We rely a lot on consumer confidence, because that’s when people spend money,” Weber said. “Is a recession coming? The percentage of people who think there is [a recession coming] is going up.”

So far this year the city has collected roughly $118,000 less in sales taxes through May than in 2024. Weber said she expected June to come in higher than last year, as the Steamboat GRVL cycling event moved to earlier in the summer.

“I think we will start seeing declines from there on out,” Weber said.

The projected funding shortfall has been telegraphed for more than a decade by City Councils that have repeatedly stated goals about fiscal responsibility and diversifying general fund revenues. The current council’s answer to budget challenges has been a pair of new revenue measures, one of those being a new lift tax deal with Steamboat Ski & Resort Corp. announced Tuesday that would deliver new revenue next year.

Council is also pursuing a vacancy tax proposal, which will need to be approved by voters in November. As discussed, the vacancy tax would raise nearly $7 million in new revenue in the first year by placing a $3,100 fee on homes that go empty for more than half the year. Council will begin the process of referring a vacancy tax question to voters next month.

Weber said new revenues haven’t been factored in to her projections, as neither of them are finalized at this point. Staff will present a balanced Budget proposal to council in October.

Council didn’t have a robust discussion about how to deal with a smaller budget in 2026 on Tuesday night. Still, Council member Michael Buccino said he felt they didn’t need to make any drastic cuts, instead relying on savings the city sees every year from vacant positions.

Weber said the city has come in under budget in recent years due in large part to vacancy savings, but that if they we’re fully staffed she would need to come back to council for more funding.  

“That would be the kind of problem that I would then easily dip into reserves,” Buccino said.