The Denver Gazette

City to vote on $70M sales tax hike

BY NOAH FESTENSTEIN The Denver Gazette Denver Gazette reporter Alexander Edwards contributed to this report.

The Denver City Council on Monday will consider approving a sales tax hike to fund Denver Health.

The proposed tax hike, which councilmembers sparred over and advanced, 9-1, last week, faces its second and final vote on Monday.

Denver voters will ultimately decide its fate in November.

The proposal adds 0.34 points to the current sales tax rate of 8.81%, raising it to 9.14% total. The proposed increase is expected to provide up to $70 million to fund Denver Health, a network of healthcare providers throughout the city that includes clinics in schools and other services.

With other proposed tax increases also in the pipeline, Denver’s taxpayers could see the rate go up as high as 9.61%.

The Denver Health-funded tax increase could also make Denver the highest taxed cities in Colorado, surpassing Boulder and Colorado Springs.

District 1 Councilmember Kevin Flynn was the only councilmember who voted against the tax hike.

Last week, Flynn criticized the proposed sales tax increase, saying he worries that the city has begun to “reflexively” turn to sales taxes to fund programs. He called sales tax increases the most “regressive” form of increasing citywide revenue, arguing it would affect lower-income residents especially hard.

“My vote tonight is one of protest, but I am not going to campaign against the sales tax increase,” Flynn said last week. “I just wanted to go on the record as saying that we should have a more comprehensive solution than turning to our sales tax.”

District 10 Councilmember Chris Hinds lauded Denver Health for its services, despite having reservations on the mechanism to raise new money to help in its operations. Hinds supported many of the city’s previous tax increases, but, like Flynn, he said he also worries that the most recent proposed rate increase may be a tad too high versus the previous 0.25-point tax hike. Still, he voted for the proposed tax hike.

The $70 million that the tax hike is estimated to generate is the same amount that the Johnston administration has already spent on the illegal immigration crisis.

To date, more than 42,000 immigrants — mostly from South and Central America, specifically Venezuela — have arrived in Denver since December 2022.

Early in the crisis, Denver officials decided that city taxpayers would assume the cost of temporarily sheltering the immigrants, as well as tickets to their final destination. In order to pay for that response, Johnston’s administration has had to freeze hiring and cut services, including hours at DMV locations. The city also decided to skip planting flowers in order to save money.

Despite officials in El Paso Texas blaming onward travel for drawing immigrants to Denver, officials here have doubled down on its onward travel policy as part of the city’s new long-term strategy designed to pivot away from an emergency response. In the city’s so-called “Newcomer Program” immigrants receive at taxpayers’ expense six months of rental, food and utility assistance, a computer, prepaid cell phone and metro bus passes.

The Johnston administration’s other major spending priority is tackling homelessness. The city is on track to spend $155 million between July 2023 and December 2024 — $65 million more than Johnston previously said it would cost.

Johnston has made getting homeless people out of the city’s streets his top priority. He vowed to transition 1,000 people by the end of 2023 and another 1,000 before next year.

Since passing the 2024 budget and approving contracts for homeless services, the City Council had never once received a briefing on where the total cost of the program stood. Last Tuesday, Councilmember Amanda Sawyer, doing math on the fly during a committee meeting, said the city will spend about $155 million between July 2023 to December 2024. The program’s startup costs alone totaled $84 million, Sawyer said.

In other action Monday, the council is expected to tackle the following:

• First reading for an ordinance to consider establishing collective bargaining as a way of setting compensation, among other terms and conditions of employment, for certain city employees. Councilmembers will consider approving the measure and send it to the ballot for Denver voters to decide in November.

• First reading of a bill to discuss the organizing and creation of the Ballpark Denver General Improvement District.

• A $ 5 million, three year on-call contract with Consor Engineers to design and plan improvements for bicycle, micro-mobility, pedestrian, transit and greenery in the Globeville, Elyria-Swansea neighborhood, downtown Denver and connecting neighborhoods.

DENVER & STATE

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https://daily.denvergazette.com/article/281608130616086

The Gazette, Colorado Springs