Vail to cut $4.45 million from town budget as low snow hurts winter sales

Why it matters

The cuts will decide how Vail handles staffing, daily operations and town projects after visitor-driven winter revenue fell short. With sales tax now projected at $40.3 million for 2026, the March supplemental budget is where the council must match spending to the money the town actually expects to collect.

Council signals support for $4.45 million in cuts

The Vail Town Council signaled approval Tuesday for $4.45 million in budget reductions for 2026 after town staff lowered revenue forecasts following a softer than expected winter season.

Colorado's historically low snowpack is affecting Vail's economy, and finance and economic development staff told the council early indicators from sales tax, lift tax, parking revenue and lodging data point to a softer than expected winter season.

Mayor Barry Davis backed revisiting the plan in March, when the council passes its first supplemental budget of 2026 and the recommendations become official. 'I think it's important that we don't have our head in the sand for what's going on and we revisit this in March,' Davis said.

December collections show winter slowdown hits town

December sales tax collections in Vail fell only slightly, down 1.3%, or about $60,000, to $5.78 million, but lift tax and parking collections dropped by double digits.

Lift tax collections in December dropped 14% compared with December 2024, and daily parking sales through Jan. 25 were down 13.3% compared with the same period last year. Mia Vlaar is the town's economic development director.

A January lodging pulse survey of 60 lodging partners, conducted by Discover Vail, the town's marketing organization, revealed a sharp rise in cancellations over the past several weeks, staff said.

Staff lowers 2026 forecasts for town money

Town staff now projects sales tax revenue will decline 10% for the remainder of the winter season and 4% for the rest of the year, with the revised 2026 projection set at $40.3 million.

That $40.3 million figure is a 5% decrease from what was projected in the 2026 budget. Lift tax revenue is expected to total $6.1 million, down 9% year over year, while parking sales are projected to fall 7% compared with 2025.

Finance director Carlie Smith said 2025 is expected to perform better than budget. 'For 2025, we are expecting to perform better than budget, likely meeting or exceeding revenue projections and also realizing savings within capital operations and personnel,' Smith said.

Cuts touch workers, daily operations and town projects

To offset the revenue losses, staff recommends $4.45 million in reductions across town operations, amounting to about a 2% cut in total expenditures for Vail.

The plan includes a 1% reduction in personnel costs, or $345,000, through managed vacancies and savings from unused vacation buybacks. It also calls for a 5% cut to operating budgets across the general, real estate transfer tax and heavy equipment funds, totaling $1.1 million.

Capital projects would take a 10% reduction within the capital and real estate transfer tax funds, totaling $3.3 million. The council signaled approval Tuesday, setting up the March supplemental budget as the point when the reductions become official.