Saturday 29th May 2021
Now is not the time to raise taxes, officials decidedly elected on Tuesday, citing the pandemic that has hit lower-income households particularly hard. But it also cut city budgets at a time when Boulder was already facing an uncertain financial future.
The city council gathered to look for ways to increase revenue as sales tax – the city's main source of income – slowly declines in the face of a declining and aging population, and national spending shifts from taxable goods to mostly untaxed services .
While leaders fully agreed that higher taxes this year would be neither fair nor wise, two councilors expressed their reluctance to seek increases regardless of the economic state of the community.
"I do not support additional taxes at the moment or too many in the future," said Mirabai Nagle. "Right now we are making it really difficult for the people who really live here. We hear all the time that it is difficult to pay their mortgages and property taxes."
"It feels like we're talking about tax increases and later figuring out how to spend them," said Bob Yates, calling himself a "grumpy anti-taxpayer." (Yates is a registered Republican, a rarity under Boulder's leadership). “I think we need to first determine the need and then talk about the tax or fee.
"My answer is none of the above until we identify needs."
Boulder has a laundry list of unpaid projects, others pointed out, as well as some lofty and expensive goals that will cost millions to achieve.
As Mayor Sam Weaver said, "I don't think there is a lack of identified needs."
"Not sexy, but necessary"
The only tax measure going to voters this fall will raise more than $ 100 million and still pay less than half of the city's identified $ 307 million in unfunded needs, as Mark Wallach later said in the Discussion of the night noted.
A 10 or 15 year extension of the Community Culture Safety Tax is chosen. It is not a new tax so the bills will not be increased. The sales tax of 0.3% expired this year. Originally implemented in 2014, it was renewed by voters in 2017 and paid for things like improving the Scott Carpenter pool and reconfiguring the civic area.
This time it was renamed Community Resilience and Safety Tax, a nod to some of the projects it would fund. A list of preferred priorities has been drawn up by staff and a subcommittee of the council and will soon be tested in a community survey.
Priority Projects – $ 61 million
Boulder Fire Rescue Facilities
- Station 3 – $ 11 million
- Station 2 or 4 Land – $ 6 Million?
Maintenance of the transport network
- Pavement management, replacement of defective signal masts, bridge refurbishment – USD 14 million
Parks and recreation
- Boulder Creek Corridor Rehabilitation – $ 7M
- East Boulder Rec Center Renovation Including Energy Upgrades – $ 13.5M
Outreach and customer service technology upgrades
- Constituent Relationship Management System (Inquire Boulder) – $ 2.7M
- Enterprise Date Warehouse – $ 2M
Other possible projects – $ 99 million
Boulder Fire-Rescue Capital
- Replace Station 2 or 4 – $ 35M each
- Advanced Paramedicine Capital Equipment – $ 5.5 million
Maintenance of the transport network
- Intelligent Traffic Signaling System – $ 3.2M
Parks and recreation
- North Boulder Rec Center Renovation Including Energy Upgrades – $ 14.5M
- South Boulder Rec Center Renovation Including Energy Retrofits – $ 9.5M
- East Mapleton and Valmont Parks – $ 14 million
- usefulness Bury power lines underground. This reduces outages that are often caused by falling trees etc … – $ 12.5 million
- Street lights The process of taking over the physical system from Xcel. Technically, Boulder would buy it. But because … of Xcel Energy, a publicly traded utility company based in Minnesota. – $ 5 million
Find out more about this tax and other possible voting actions for 2021
Residents are also asked how much of the tax should be earmarked for nonprofit groups, as in previous iterations of the tax. This money was used to finance the renovation of the Dairy Arts Center and the $ 11 million move and expansion of the Museum of Boulder, among other things.
The councilors of the finance strategy committee want to keep the nonprofit portion low so that as much money as possible is used for infrastructure needs. There has been some disagreement between the councils on this point. Such funding is always popular with the public.
Wallach rejected arguments that a higher portion of the tax should go to charitable organizations.
“If we are serious about capital improvements, many of which are very appealing and some of which are not sexy at all, but all of which are necessary for the health of this city, we have not been inclined to take money away from the needs that need to be funded, things that are built and services that need to be made available to our citizens, ”he said.
Only a few tools left in the toolbox
This question of popularity runs counter to best practices across Boulder's overall budget. For example, limiting funding to specific programs or projects is not recommended, but 62% of city spending is used this way.
The money tends to go into things that are largely supported by residents in both surveys and public satisfaction surveys. Open spaces have the highest proportion of decimated funds (98%) of all urban departments. For this purpose, voters have repeatedly approved tax extensions and increases, most recently in 2019.
Boulder sends far less to its discretionary general fund than other cities, Skinner said. According to Devin Billingsley, Senior Budget Manager, general funds are also used for libraries and fires, while most other places have specific districts for these.
For every US dollar of sales tax the city collects,
- 46 cents go to the general fund, which takes on almost all essential government functions
- 20 cents are earmarked for open spaces
- 19 cents go to the transport fund
- 7 cents are for parks and recreation
- 3 cents fund community, cultural and security tax purposes
For every US dollar of property tax the city levies,
- 66 cents go to the general fund
- 17 cents go to the general fund, which is specifically intended for public safety (police, fire brigade).
- 7.5 cents go to Parks & Rec
- 6.7 cents go to affordable housing
- 2.8 cents go to the library
Learn about the city's finances
Politics also affects what types of taxes are paid to voters in the first place. Of two dozen municipal tax increases and extensions over the past 12 years, only one related to property tax in 2008.
Property taxes are less regressive than sales taxes because people who own property are generally wealthier and (usually) pay on an appreciative asset basis. (For a full list of the pros and cons of different taxes, see the end of this story.)
But property owners traditionally vote in larger numbers and report better access to and greater satisfaction with local government. All but one of the current councilors are homeowners and therefore more directly affected by property tax increases (although landlords will certainly pass the costs on to tenants). The grumbling against higher property taxes has become louder in recent years with rising house values, which is evident in the recent discussion about a possible library district.
Boulder is less dependent on property taxes than our twin cities, with the third lowest rate out of nine neighbors. It has the highest sales tax in the same group, possibly due to the large number of tourists and commuters.
In any case, Boulder has almost exhausted both sources. There are no sales tax rates greater than 9% along the Front Range – the city is 8.845% – and there is a charter limit on property tax of 13 mills; Boulder currently uses 11,981 of these mills.
"Boulder has reached into the toolbox, so to speak, and has used a lot of tools," said Kara Skinner, assistant finance director, on Tuesday. "There isn't a substantial number (of taxes) that the City of Boulder hasn't yet established."
Progressive is proving to be popular
Going forward, a car and / or driver fee is the new funding mechanism that is most likely to be introduced. The Council discussed this fee at length in order to finance dilapidated roads and modernization of the bicycle, bus and pedestrian infrastructure. It could raise up to $ 5 million annually.
Council members on Tuesday also expressed their support for taxes on large businesses, storage facilities, and parking or usage fees for non-resident visitors to the open space (another idea that has been talked about for years).
There was a keen appetite for taxes or fees for “luxury items” and services. That said, these things are more likely to be used by wealthier people. Such funding would be considered more advanced than Boulder's current sources.
"It's difficult to have a progressive tax, ”Skinner said. "Most of the funding options available to a local government are relatively regressive or neutral," because state law prohibits anything that is considered to be income tax.
On its retreat in 2019, the city council discussed a tax on vacant houses. Crested Butte and other hill towns – with their disproportionate share of vacation homes that are vacant for most of the year – have recently been seriously debating this. But the idea hasn't been mentioned in Boulder since that brief discussion two years ago.
Councilor Rachel Friend asked for a list of possible progressive taxes Boulder could pursue. Councilor Adam Swetlik summarized the general feedback from the council and perhaps said a little generously: "All of these (new) taxes must be progressive at all times. "
Council members on what taxes / fees they want to see
"I'm very interested in some kind of poll tax," which may be aimed specifically at publicly traded companies.
Also in favor of the taxation of storage facilities: "It means you have so much stuff that you need extra space to store it. For me this is a luxury item. "
Increase in property tax: "I don't think we should be following this, not now, not next year. I get this idea of progressive tax versus sales tax, but I still believe we all have to contribute so I am not against sales tax. I pay sales tax and I am probably one of the lowest income people on the council. I am happy with my contribution to making Boulder better. "
"In general, I would hope to see some sort of progressive tax list and ideally the implementation of the racial justice tool. And make sure we align these considerations with our master plans. "How are the taxes that we are going to look at, or the fees that align with our values and goals?" B. the reduction of vehicle journeys?
Interested in services, interested in poll tax "to understand the impact this could have on the business world" and generate revenue. Also in favor of an oNon-resident pen fees for parking or use.
"The only thing I would personally consider is something for out of town users on our open space. If we were to impose a poll tax, there would have to be very specific pieces of legislation in it that protect our small businesses. It is not advisable to put any further pressure on them at this time. "
Interested in studying taxes on personal services, the transportation charge, a poll tax, and an excise tax on storage facilities.
"The two best I have to see" are a transportation fee and "a poll tax that exempts the smallest businesses and non-profit organizations. "
"In the long term, it would be good to examine which services could be taxed in a non-regressive way". "I would like to see an analysis of what could be neutral or progressive."
Does not benefit from new taxes or fees
Weighing up different funding mechanisms
New or increased sales tax
- Usually keeps up with inflation
- Big bucks (all 0.1% sales / use tax = $ 3.4 million)
- Transparent (evaluated with every transaction)
- Fluxes a lot with economic conditions
- Regressive (poorer people pay more of their income)
- It has a negative impact on the competitiveness of companies
- Major cultural shifts away from goods (taxed) to services (untaxed)
- Voter approval had to be expanded
- Less transparent overall (I don't know where the funds are going or how much each person pays each year)
Increased property tax
- Fair (owners benefit from sidewalks, parks, fires, etc.)
- Stable (property values have historically only increased here)
- Delay in impact in case of economic downturn (based on a two-year evaluation plan)
- Efficient collection and management by the district
- Less regressive, more neutral
- Tax on "unrealized capital gains" (invoice increases if cash flow does not occur)
- Larger flat-rate payments
- Not overly transparent (value needs to be estimated and owners are unsure of taxes owed)
Selective sales tax
- Can target specific needs
- Limited income The process of generating electricity from a source (fossil fuels like coal or renewable sources like … (0.1% increase in meal service = $ 424,000; Rec-pot increase by 0.1% = $ 576,000)
- Can be heavily influenced by the economy (hotel tax, short term rentals, etc.)
- Can be regressive (depending on what is taxed)
- Can affect the competitiveness of companies
- Temporary limited transparency
- Voter approval must be changed / increased
Increased excise tax
- Links have a direct impact on sales
- Can be regressive
- Not that much revenue (Housing Tax Increase from 7.5% to 8.5% = $ 700,000; Registration Tax from 5% to 6% = $ 100,000; Short Term Rental Tax from 7.5% to 8.5% = $ 134,000)
– Shay Castle, [email protected], @ Shayshinecastle
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budget guide Aaron Brockett Adam Swetlik poll Bob Yates Boulder budget City of Boulder COVID COVID-19 fees Poll tax Infrastructure Junie Joseph Library district low income Mark Wallach Mary Young Mirabai Nagle Open space pandemic Parks progressive Property tax Rachel Friend regressive value added tax Sam Weaver Tax extension Taxes transport Voters
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