Tax pileup coming to November ballot? A
slew of approved and potential tax measures for Denver’s November ballot are poised to test the tax tolerance of one of the state’s friendliest counties for spending measures.
Campaigns are gearing up to pitch sales tax increases in support of several causes that, on their own, each sound noble. Already approved for the ballot are a City Council-referred sales tax increase to support more parks and an initiative by education, nonprofit and business leaders to fund college scholarships for the city’s youth. Initiative petitions for another tax that would support mental health and drug treatment programs now are under review, and on deck is the filing, in coming days, of petitions for a fourth tax that would raise money for healthy food programs serving at-risk children.
Add in an amendment that would raise the state income tax on higher-wage earners for education and a likely statewide tax measure for transportation, and the state’s largest county has the makings of a tax pileup on its Nov. 6 ballot.
Will voters flinch?
For years, political analyst Eric Sondermann has watched Denver voters repeatedly approve tax increases for big public projects and social initiatives, with few aberrations, and relax spending restrictions on the city budget. Given that history, it’s possible the city’s voters would sign off this time on the $116 million a year or more in new city spending that’s proposed.
But Sondermann said the backers of
each local initiative ought to be worried, even if not all of the potential local measures make the ballot.
“The state questions — particularly the highway tax and the education tax — are going to be well-heeled campaigns,” he said, leaving the local campaigns at a disadvantage. “I think you will start to see Denver voters picking and choosing here. And that becomes dangerous if there’s not a broad consensus as to what the priority is.”
Mayor Michael Hancock, who signed off on the council’s dedicated parks tax ballot measure, also has worries.
“Just like at home, you may have 10 things you want to buy — but you realize that my resources just don’t go that far,” he said in an interview. “These are all priorities, and we’re going to have to, as voters, make some tough calls.”
Denver voters have been choosy before. In fact, in 2015, the predecessor of this year’s college scholarship tax went down by a margin of fewer than 4 percentage points.
It’s easy to imagine the public debate then — which focused in part on whether helping residents pay for college was within city government’s domain — playing out again for some of this fall’s potential measures.
Let’s say voters don’t pick and choose, instead approving them all. And let’s say the state’s voters approve the transportation measure, which proposes an increase of 0.62 percentage points to the 2.9 percent state sales tax. That one is backed by the Denver Metro Chamber of Commerce, other business groups and local government leaders across the state, though a competing group turned in petitions for a transportation measure that authorizes borrowing without new taxation.
Here’s what all the new taxes would mean in Denver: an effective sales tax rate of 8.93 percent on regular purchases, up from 7.65 percent now. For a $10 purchase, the purchaser would pay 12.8 cents more in taxes — an amount that won’t seem like much to some but is more meaningful to lower-income earners, as critics of sales tax increases point out.
The collective sales taxes proposed by the city measures amount to 0.66 percent. Here’s a breakdown, including proponents’ estimates of revenue that would be generated:
• 0.25 percent for a dedicated fund to acquire and maintain parks, generating about $46 million a year. Referred by the council in July in a 12-1 vote.
• 0.08 percent for the Denver College Affordability Fund, generating $13.9 million a year for local scholarship organizations to reimburse education expenses and provide support services for Denver residents 25 and younger. The campaign is backed by the Denver Scholarship Foundation and the Denver chamber, among other groups, and ballot petitions were found to be sufficient earlier this summer.
• 0.25 percent for the Caring 4 Denver initiative, generating $45 million a year for mental health and substance abuse treatment programs. Backers of the campaign — including state Rep. Leslie Herod, D-Denver, and the Mental Health Center of Denver — turned in petitions for verification to the Denver Elections Division on Aug. 2.
• 0.08 percent for the Healthy Food for Denver’s Kids Initiative, generating $11.2 million to support existing programs that provide healthy food and food-related education to Denver children.
The healthy food initiative is spearheaded by Blake Angelo, who formerly worked on food programs in city government, along with his wife, Enna Kladstrup, and an army of volunteers. They expect to turn in initiative petitions ahead of Denver’s Thursday cutoff, which gives Denver Elections time to verify petitions ahead of the state’s Sept. 7 ballot certification deadline.
Angelo sees the potential ballot crunch as a reality under Colorado’s Taxpayer’s Bill of Rights, the state constitutional amendment that requires voter approval for any tax increases.
“Asking voters to help set public spending priorities follows through on the values that Coloradans have said they want to embrace in terms of public spending,” he said.
A spokesman for the Prosperity Denver campaign for the college scholarships measure says city voters are thoughtful and will judge each tax on its merits. “Our job is to demonstrate how access to education is the lever to economic self-sufficiency and will increase equality of opportunity for our young people,” Roger Sherman said.
Herod, from the mental health tax campaign, acknowledged it likely wouldn’t be assured an easy ride in a high-interest election with so many issues and races competing for attention. But she expressed confidence.
“The biggest challenge is not that people don’t support this initiative,” she said, citing encouraging early polling. “The biggest challenge is breaking through the noise.”