Your City Council is Seeking New Funding
Why Is This Important To Business?
We all benefit from the shared responsibility of maintaining basic municipal services: roads, police, fire, etc. We also benefit when a few frills are added to provide identity and draw customers in to local businesses. However, there is a point at which too many frills become an economic burden to business and residents alike as costs begin to outweigh benefits. Your Chamber is asking the question, “Have we reached that inflection point?”
What Is The Issue?
By now you’ve probably heard our municipal budget is approximately $48M short in covering costs to achieve the objectives included our Parks & Recreation, Transportation, Housing, and Climate strategic plans. The actual number is much higher, but even this Council recognizes there is a limit to how much government residents can afford. You can read more about what is entailed in this long-term funding gap here.
Rather than engaging a conversation of what our City government can afford, what we can stop doing, or delaying implementation of programs and services until funds are available, Council is pursuing options for raising more revenue. So far, those options are mixed bag of new, repurposed, and increased fees and taxes that will impact everyone’s pocketbook. Mindful that voters must approve any changes to our tax structure, new and increased fees can be implemented with less fanfare.
Council is aware that a bevy of new taxes on a single ballot reduces the likelihood of passage. Individual measures will be introduced over the next few election cycles. The following schedule is based upon the most recent conversations of City leadership.
November 2023 5% excise tax on packaged liquor, marijuana, and tobacco products (estimated to provide $11M annually); 5 mil property tax increase ($18M annually)
November 2024 Renewal, possible repurposing street maintenance and capital improvement sales taxes (0.25% currently)
November 2025 Large Emitter Tax; Climate Tax
The proposed “Large Emitter Tax” is somewhat novel and results from a pesky detail in Colorado law. Any revenue collected from a fee must be utilized to reduce the adverse impact of the activity that generates the fee. So, if Council imposed a fee on large GHG emitters – as defined by the Environmental Protection Administration (EPA) – the resulting revenue would need to be spent on efforts to lower the emissions of the entities paying the fee.
According to the EPA, there are five large emitters operating within Fort Collins area: Platte River Power Authority, CSU, Larimer County Landfill, Broadcom, and Anheuser Busch. As the City does not have the authority to impose fees on other governmental entities, Broadcom and AB are the only eligible targets for the fee. Because the City wants the money to pursue other projects, they would need to assess a tax instead. Essentially, the City would ask voters to pass a tax measure that is paid for by two of our largest employers that are working tirelessly to reduce their emissions.
The Climate Tax would be modeled on a structure recently approved by voters in Boulder, in which energy utility customers are assessed a tax based upon usage. Unlike Boulder, electricity is generated and delivered through public entities, so it’s not yet clear whether such a tax would be imposed. However, a tax on natural gas deliveries through Xcel Energy is certain. The tax rate and revenue projections have not yet been shared publicly.
We invite you to continue to track these important conversations as we consider the impact to livability in Fort Collins.
- Increasing the cost of living lowers our economic resiliency, while reducing the opportunity for success for small, independent businesses.
- Economic opportunity for lower-income, semi-skilled, and young workers decreases as taxes increase.
- Planning documents are developed in a vacuum. Polling residents to determine amenity preferences in the absence of cost projections is irresponsible.
- The planning process is additive. Residents are not asked what they are willing to give up in return for something new.
- Capital improvement assessments (i.e. Building on Basics, park fees, etc.) are exclusively directed to new facilities. Operations, maintenance, repair, and replacement of those facilities are not adequately accounted for within the budget process.
- The stated imperative of fostering a more diverse, equitable, and inclusive community cannot be achieved by simultaneously increasing the cost of living.
- Our ability to address direct and prolonged threats to our economic wellbeing are greatly diminished as our resources are stretched to serve a growing array of desires.
- Establish project budgets that deliver on basic needs. Additional wish list items must identify a source of funding that does not impair the ability to deliver on other community priorities.
- One option to close the funding gap presented to Finance Committee included an across-the-board reduction of general fund expenditures equal to 5%. This could serve as the baseline strategy as more targeted adjustments are identified.
Source: Fort Collins Area Chamber of Commerce