SFC recommends higher taxes, fees

To ensure a more sustainable funding structure, the City of Colorado Springs should consider implementing new taxes and fees, extending or increasing existing taxes and fees, reducing existing tax exemptions, and augment or modify the way it provides services.

Those recommendations, and others, will be presented to the City Council this afternoon by the Sustainable Funding Committee, which has completed a 300-page report about the city’s finances.

The committee recommends that City Council consider the following new taxes/fees: 

  • Employment tax/fee
  • Vehicle registration fee for transportation expenditure purposes
  • Medical emergency response fee

The revenue subcommittee is proposing that council consider an employment tax/fee of $5 per employee per month. Members did not specify whether the tax/fee would be paid by employers or employees.

According to the report, Denver levies an “occupational privilege” tax for $9.75 per month for each employee ($5.75 is paid by the employee and $4 is paid by the employer). Sheridan levies $3 per month, Aurora levies $4 per month and Glendale levies $5 per month.

The subcommittee estimates that the tax/fee would raise about $12.7 million during 2010, and that revenue would grow about 1.6 percent per year to $13.5 million during 2014.

To help supplement the city’s transportation revenue, the subcommittee also is proposing that City Council consider a $10 or $20 per year vehicle registration fee.

The medical emergency response fee would provide reimbursement of fire department costs for medical emergency response.

According to the report, American Medical Response currently bill patients for the costs of their services. The company’s base rate for advanced life support transport is $622.82 per transport. Any additional fees would be added to this total.

The report says that a $25 reimbursement for the fire department was considered during contract negotiations with AMR, but was not implemented.

The SFC also is recommending that the city consider the following extensions/increases of existing taxes/fees:

  • Increase the lodging tax from 2 percent to 4 percent
  • Increase the auto rental tax from 1 percent to 3 percent
  • Extend sales taxes on goods, currently 2.5 percent, to services purchased by the general public, not businesses
  • Increase the property tax, currently 5 mills, by 1 mill to 5 mills
  • Increase the sales tax on alcohol from 2.5 percent to 3.5 percent or 4.5 percent
  • Increase sales tax on restaurant purchases from 2.5 percent to 3.5 percent
  • Extend the sales tax to cigarettes
  • Extend sales tax to cell phones

The committee further recommends that the city eliminate sales tax exemptions for nonprofit organizations, except for 501(c)(3) organizations.

The committee also is advocating that the city augment or modify the way it provides services. Its recommendations include:

  • Encouraging efficiency
  • Encouraging innovation
  • Consolidating services
  • Outsourcing and or/managed competition
  • Charging for full cost of providing services
  • Greater use of volunteers
  • Additional use of technology to reduce costs/improve service
  • Using special districts
  • Addressing the capital needs backlog

A subcommittee also examined the city’s assets and enterprises to determine their role in long-term sustainable funding and how they might best be monetized.

The SFC is recommending the following actions: 

  • Colorado Springs Utilities – Altering the governance model of CSU is recommended, along with the adjustment of utility rates over time to a market index in order to provide additional funding for the city.
  • Memorial Health System – Further study of options to change the governance and ownership of MHS are recommended.
  • Parking system – Continue operations as is, while considering a sale to downtown quasi-governmental interests.
  • Colorado Springs Airport – Continue aggressive management for economic development purposes. Do not seek a pilot program. Seek creative enhancement for returns to general fund.
  • Cemetery operations – Seek a management contract that will expand services offered and compete in the industry for a return to the city.
  • Patty Jewett Golf Course – No change.
  • Valley High Golf Course – Seek privatization opportunities that will increase revenue to the city through long-term leases or management contract.
  • Human Services Complex (Golf Acres) – No change
  • Pikes Peak Highway – No change

 The SFC’s report is available at www.springsgov.com/CCBIndex.aspx?CCBID=19.

6 Responses to SFC recommends higher taxes, fees

  1. The report states:
    “Increase the property tax, currently 5 mills, by 1 mill to 5 mills”

    Is this some of the new math?

    Thomas DuDash
    August 10, 2009 at 1:27 pm

  2. I think it means they are recommending to raise it in that range of values – 1-5 for a total of 6 to 10 total.

    Matt
    August 10, 2009 at 2:14 pm

  3. If any of these tax/fee proposals make it to the ballot, I say they are DOA!

    Dick Burns
    August 10, 2009 at 2:29 pm

  4. If the City Council would like to all be voted OUT in the next election cycle, I recommend they follow all of these suggestions. Being a small business owner, this is just what we need to stimulate job growth in Colorado Springs when the federal government is already trying to force health care and higher employment taxes on us is to then have the city hit business with “occupational privilege” taxes, higher utility rates and a myriad of other venues they can tax us on. One thing that will increase the citiy’s use/sales tax revenues immediately, get rid of the parking meters downtown. One of the reasons people don’t shop there is because it costs to park. Why do you think the malls have free parking lots/garages? The restaurants and small businesses in the downtown corridor would explode with new business.

    And didn’t Ritter just increase vehicle registration fees by $42 a year?

    Here’s what I propose – if you want more money from the utilities side of the equation, quit giving out millions of dollars in bonuses and stop raising the rates on your customers because you’re not selling new housing starts. If you want more money from the hospital, do the same thing and pay the people who do the actual work a living wage. If you have to continually train new people, you’re wasting money and time. Have an efficiency expert who knows city governments/utilities/medical operations come in and make suggestions where consolidations could be made in our own back yard before we put any more of the burden on our struggling population and businesses. If you remember during the presidential campaign, one of the points McCain tried to make was that if given a choice, where do you think a business would locate, where it has to pay a 10% tax rate or a 3% tax rate? Why does everyone wonder why so many jobs go off shore? It’s called NET PROFIT!!

    You can’t tax us into prosperity!! There are still plenty of fiscally conservative people/business owners in Colorado Springs that could bring a wealth of information to the city for free – and yet we don’t use the resources available to us. Pay the fee to the efficiency expert but follow their suggestions. If someone deserves a raise, give it to them. If one person can do the job and you have three, get rid of two. This is how it works in the real business world, why shouldn’t that apply to our city government also? We all have to live within a budget, why shouldn’t they?

    Lynn Liggett
    August 10, 2009 at 5:17 pm

  5. ……… lemme get this straight,
    here, in the Land of TABOR, the Gov’mint is gonna try’n sell us;
    a 100% increase in lodging tax
    a 200% increase in rentacar tax
    a 20-100% increase in property tax
    a 40-80% increase in liquor tax
    a 40% increase in a restaurant tax
    a new vehicle registration fee
    AND
    charge everybody $5 a month just because they have a job ?
    WTF ?

    Like it'll matter .....
    August 10, 2009 at 8:03 pm

  6. WTF, indeed! And nowhere in these job-killing proposals is even a small rugby field!

    Dick Burns
    August 10, 2009 at 9:28 pm