Election 2021: Idaho Springs’ 1% sales tax question would offset water, sewer rate increases

Marijuana excise tax would go toward recreation

Corinne Westeman
cwesteman@coloradocommunitymedia.com
Posted 10/19/21

Idaho Springs has two questions on the Nov. 2 ballot, and the City Council has passed resolutions encouraging voters to approve both a sales tax increase and a marijuana excise tax. The 1% sales tax …

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Election 2021: Idaho Springs’ 1% sales tax question would offset water, sewer rate increases

Marijuana excise tax would go toward recreation

Posted

Idaho Springs has two questions on the Nov. 2 ballot, and the City Council has passed resolutions encouraging voters to approve both a sales tax increase and a marijuana excise tax.

The 1% sales tax measure, if passed, will fund water and wastewater operations and projects and, thus, partly offset rate increases for residents and businesses. Potentially, by 2030, it could save a residential user about $690 annually, Councilman Chuck Harmon said at the Oct. 11 council meeting.

“I think that’s pretty big money,” he said of the potential savings.

Councilman Arthur Caccavale said he hoped the language on the ballot was strong enough to get that goal across to the public.

The ballot question doesn’t include a specific end-date for the sales tax, although City Attorney Carmen Beery has clarified that the council can eliminate it without asking voters.

Such a tax would bring in an additional $750,000 annually, which would go toward paying off debts for the wastewater treatment plant expansion, upcoming projects, and general operations.

Consultants have told the city that a 1% sales tax would also save a typical resident about $150 on water and wastewater bills in 2022 alone, and savings through 2030 would be substantial.

While discussing the measure over the past few months, the councilmen have expressed their mixed feelings about the proposed tax. They pointed out that if this and the county’s 1% sales tax for Road & Bridge operations both pass, the city’s combined sales tax rate would climb to 10.65%.

Caccavale has previously stated that he felt locals were being over-taxed, and he wished the city had planned things better to avoid this.

“If we don’t get (the sales tax increase), we’re in trouble,” he said on Aug. 16.

John Curtis said at the Oct. 11 meeting that he likewise wished the city could find an alternative revenue source to fund its water and wastewater operations, rather than proposing a sales tax increase.

Curtis was the lone opposing vote on the City Council’s resolution asking voters to approve the sales tax.

The breakdown

During an Aug. 16 work session, consultant Andrew Rheem looked at projected water and wastewater rate increases under various scenarios through 2030. All the numbers he showed were for a typical residential customer who used 10,000 gallons bi-monthly with a 5/8-inch meter.

Rheem showed a current bimonthly water bill at $122. Under the base case, which is if there’s no sales tax revenue, it’d rise to $191 by 2030. With the 1% sales tax, it would rise to $156 by 2030.

On the wastewater side, Rheem showed a current bimonthly bill at $87. Under the base case, it’d jump to $108 in 2022 and continue increasing until it reached $180 in 2030. With the 1% sales tax, though, the rate increase would be more gradual, reaching $100 in 2030.

Rheem told City Council that there would still be a need for water rate increases even if the 1% sales tax passes, but the increases won’t be as steep if offset by additional revenue.

Mayor Mike Hillman has pointed out that residents will still be paying part of those increases, but at local businesses rather than on their utility bills. However, he said, the city doesn’t have many mechanisms to make up the difference between revenues and expenditures.

“We have no other way to do something like this except with sales tax,” he said on Aug. 16. “ … It was dumped on this council to make those hard decisions.”

Marijuana excise tax also on ballot

Idaho Springs voters will also decide on a 5% marijuana excise tax question. If passed, the revenues will go toward current and future recreation amenities around the city.

The city anticipates $50,000 in revenues from this excise tax next year, if passed.

City officials explained that the tax is already in place at the county level, but if the voters approve it, the city’s tax will replace it.

Hillman felt that the city deserved these revenues rather than the county, and said they could be used as matching funds for future grant applications.

The City Council unanimously passed an Oct. 13 resolution asking the voters to approve the excise tax.

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