TAX NEWS - 2010

Colorado Tax: City Council saves spot on fall ballot for sales tax increase

The much-discussed Resourcing Our Future sales tax proposal targeted for the fall election could end up looking quite different from what has been discussed so far.

While Fort Collins City Council members gave final approval Tuesday to an ordinance reserving a spot on the November ballot for a measure, they stressed details of the proposal have yet to be decided.

City staff members have recommended asking voters to increase the sales tax 1 cent with the goal of raising $20 million in revenue a year to fund critical needs, such as police, fire, parks and road maintenance.

But Mayor pro tem Kelly Ohlson said he expects the final proposal - if indeed one goes forward - could be for less than a full cent and carry a sunset provision.

Whatever proposal comes forward, it needs to be determined as soon as possible, even if that means holding special council meetings in the coming weeks, he said.

Ultimately voters will decide whether the proposal is worthy, he said, and they should be told what's coming "the sooner the better."

The measure passed 5-1, with member Aislinn Kottwitz in opposition. Member David Roy was not present.

Kottwitz said the city "is not ready" to go to the ballot with a tax issue.

The timing to determine the ballot language is too tight, she said. If the council decides to have an election, it must determine the ballot language by Aug. 17.

"The sales tax the way it's coming forward it is not a good idea for the citizens," she said.

In the proposal from city staff, transportation services would receive $6.5 million a year to maintain current paving standards, the police department would get $4.6 million and the fire department would get $3.2 million more a year to meet staffing requirements.

The parks and recreation departments would evenly split $2 million a year. The remaining $4 million raised by the tax would go toward unspecified high-priority needs.

The city has cut more than $24 million from its budget in recent years because of drops in revenue, officials say.

Without a revenue increase, the city will likely have to cut $5.5 million from its 2011 budget, Ohlson said, and even "uglier" cuts are likely to be needed in the years to come.

Council members said they want the tax-and-revenue discussion to continue and want to keep all possibilities on the table, including looking at fees as a way to increase funding.

Council member Wade Troxell said the city has to look at tightening its belt even more and finding a better way to prioritize its services.

Few residents spoke on the proposal, unlike two weeks ago when the ordinance received initial approval.

Gary Thomas said the city needs to increase its funding for road maintenance or its repair costs will skyrocket in the years to come. Thomas compared the proposal with changing the oil in a vehicle.

"It may not be a good time, but it's something we have to do," he said.

Resident Bruce Lockhart said the city should look at other ways to raise revenue, including selling some of its downtown property.

"I think it's perfectly proper for the city to sell off some of its assets," he said.

The city's current sales-tax rate is 6.7 percent, which includes state and Larimer County sales taxes. Increasing it to 7.7 percent would make it the fourth lowest along the Front Range.