City of Boulder 2A – Sales and Use Tax Extension

In 1992 voters approved a 0.15% sales and use tax (15¢ cents on $100) to pay for bonds for recreational improvements and facilities. The excess money generated goes into the city’s general fund. The tax is due to expire on Dec 31, 2012. This proposal asks voters to extend the tax indefinitely. In 2008 voters approved Ballot Question 202, a similar proposal for an indefinite tax extension.

The 2009 city budget is $242.7 million with $202 million in the operating budget and the remainder in the capital budget. Of the $202 million in the operating budget only $82.9 million is in the general fund. The majority of the operating budget is in dedicated funds. The general fund money is, by nature, not dedicated to a certain purpose unlike, for instance, the open space sales and use tax. Rather, it is available to fund whatever the city needs or desires including police, fire fighters, the library, parks and human services.

The total city’s sales and use tax is currently 3.41% ($3.41 on a $100 purchase) and accounts for 37% of the city’s revenue. About 60% of the sales and use tax including the tax in question here currently has sunset dates. The sales and use tax that would go to the general fund if this proposal passes is only 1.68% ($1.68 on $100). The remaining 1.73% ($1.73 on $100), a majority of the sales and use tax, goes to dedicated funds.

Recommendation: FOR

In my opinion, too many of the city’s funds are earmarked. I would like to see fewer earmarks, reducing budgetary constraints on our elected officials and city staff. The money in the general fund is not earmarked and may be spent at the discretion of the city council. Yet the general fund goes to pay for the essential and desirable services listed above and needs a relatively reliable source of funding (although I’d prefer a source that doesn’t disproportionately affect the poor). If in the future the city wants to raise the tax rate, TABOR would require the city to come back to the voters for approval.


City of Boulder Ballot Issue 2A (Approved Ballot Language)

SALES AND USE TAX EXTENSION

WITHOUT RAISING ADDITIONAL TAXES, SHALL THE EXISTING 0.15% CITY OF BOULDER SALES AND USE TAX CURRENTLY SET TO EXPIRE ON DECEMBER 31, 2012 BE EXTENDED INDEFINITELY AND WITHOUT RESTRICTION TO CONTINUE TO FUND GENERAL FUND SERVICES SUCH AS, WITHOUT LIMITATION, POLICE, FIRE, LIBRARY, PARKS AND HUMAN SERVICES, PURSUANT TO AND BY ADOPTION OF ORDINANCE NO. 7672;

AND IN CONNECTION THEREWITH,

SHALL THE FULL PROCEEDS OF THE TAX AND ANY EARNINGS THEREFROM, BE COLLECTED, RETAINED AND SPENT AS A VOTER APPROVED REVENUE CHANGE WITHOUT LIMITATION OR CONDITION AND WITHOUT LIMITING THE COLLECTION, RETENTION OR SPENDING OF ANY REVENUES OR FUNDS BY THE CITY OF BOULDER, UNDER ARTICLE X, SECTION 20 OF THE COLORADO CONSTITUTION OR ANY OTHER LAW?

FOR THE MEASURE ____ AGAINST THE MEASURE ____


Ordinance 7672 submitting Ballot Issue 2A to the voters
http://www.bouldercolorado.gov/files/Elections/2009/Ordinance_7672-SALES_AND_USE_TAX_EXTENSION.pdf