A proposal to increase Denver’s sales tax to better fund the city’s efforts to address climate change is one step closer to appearing on the November ballot.
In a unanimous vote, Denver City Council’s Safety, Housing, Education & Homelessness Committee gave preliminary approval on July 15 to a bill that, if passed by the full Council in the coming weeks, would refer the tax measure to voters for approval. All revenue raised by the 0.25% sales tax hike — an estimated $36 million to $45 million annually — would be directed to a new Climate Protection Fund, to be spent on programs to reduce greenhouse gas emissions and adapt to Colorado’s changing climate.
The potential new revenue stream is the centerpiece of a list of recommendations made by Denver’s Climate Action Task Force, a six-month effort launched earlier this year to evaluate and strengthen the city’s climate programs. The group, whose 26 members included representatives from environmental, energy and community advocacy organizations, presented its findings to the Safety Committee ahead of its vote to advance the sales tax measure.
“The bottom line is that none of these recommendations that we’ve worked so hard over the past five months to achieve will be implemented without your support,” Sebastian Andrews, a task force member and activist with the Youth Sustainability Board, told the committee. “Our recommendations will be ineffective without sufficient funding.”
“This group has given us an aggressive plan,” said Council President Jolon Clark, whose push for a separate tax measure in 2019 helped lead to the creation of both the task force and a new city climate office by Mayor Michael Hancock. “It is a real roadmap for action that can get us to where we have to be to avoid the worst impacts of climate change.”
The task force’s report sets goals of reducing Denver’s carbon emissions to 60% below 2005 levels by 2030, and achieving net-zero emissions by 2040. Those are far more ambitious targets than a previous climate action plan released by the Hancock administration just two years ago, which outlined a path to achieving only an 80% emissions cut by 2050.
The new targets reflect the increased urgency of warnings about the threat posed by rising global temperatures from climate scientists, who recommended in a landmark U.N. report released in October 2018 that policymakers achieve net-zero emissions worldwide by 2050 or sooner. Denver’s total emissions have declined only slightly since peaking around 2007, according to city estimates, and currently stand at roughly 9% below 2005 levels.
A hefty price tag
Like many reports of its kind, the task force’s recommendations encompass a wide range of policies long identified by clean-energy experts as critical steps towards “decarbonization”: incentivizing renewable electricity generation; prioritizing public transit, biking and pedestrian infrastructure; accelerating the adoption of electric vehicles; amending city codes to require new buildings to be more energy efficient and end the use of natural gas for heating and cooking; retrofitting existing buildings to do the same; and improving recycling and composting rates.
All of those proposals add up to a hefty price tag — $200 million annually for the report’s “phase one” recommendations, gradually rising to over $400 million by 2030, according to the task force’s rough estimates. Advocates for stronger climate action argue that those figures represent a bargain when compared to costs associated with rising global temperatures, from an increase in severe weather like floods, hailstorms and wildfires to negative health impacts caused by air pollution and a decline in Denver’s outdoor-based economy.
“The truth is, we need a lot (of money),” Andrews said. “However, this number pales in comparison to the potential cost of inaction in the face of climate change.”
Tax could be on Nov. 3 ballot
To help raise the necessary funds, the task force proposed several new or increased fees — including a vehicle registration fee based on fuel efficiency and higher parking-meter rates — but the largest new revenue proposal is the sales tax increase.
The proposal seeks to replace a different tax measure that has already qualified for the ballot through a 2019 signature-gathering effort led by Resilient Denver, a climate advocacy group. That measure would ask voters to fund climate programs by approving a small tax increase on electricity and natural-gas use by Denver residents and businesses. Resilient Denver, whose members participated in the task-force process, has said it will withdraw its measure if the new sales tax hike is placed on the ballot.
Resilient Denver’s energy-tax proposal, along with a similar measure pushed by Clark and other Council members last year, drew strong opposition from Hancock and local business groups, ultimately leading to a compromise that included the creation of the task force. But several Council members now question whether the sales tax increase is a better alternative.
“The sales-tax recommendation really troubles me,” Councilman Kevin Flynn, who represents southwest Denver, said during Wednesday’s committee hearing. “It doesn’t promote any behavioral changes that we want to see.”
Council members also expressed concerns about the regressive nature of sales taxes, which place a greater tax burden, in terms of percentage of income, on poorer residents than they do on wealthier ones. Denver’s sales tax, however, excludes food, medical supplies and other basic items, and advocates say that the programs funded by the increase will be targeted to benefit low-income residents and other vulnerable communities.
“We all recognize that (sales taxes) are inherently regressive,” said Councilman Paul Kashmann, who chairs the Safety Committee and represents District 6, which encompasses parts of southern Denver. “For me, the work that will be done by the money that we raise, whether it’s by the fees or the sales tax, I think will go towards lessening the burden on our most impacted communities.”
To become law, the sales tax increase must be approved first by a vote of the full City Council, then by a majority of Denver voters on Nov. 3. The potential new vehicle and parking fees, along with a long list of other recommendations made by the task force, will also require action by City Council in the months and years ahead.
“We have a roadmap to actually combating this massive crisis that we are facing, and now it falls to us,” Clark said. “It won’t be easy to implement. There are really hard decisions and hard conversations (to have), and it’ll take a real commitment from this Council to solve this problem, and live up to the charge that the task force has given us.”