Choose Your Denver: Service cuts or a more sustainable budget for the future?
By Councilperson Robin Kniech, At-Large
Denver is a great city, but behind the scenes we’ve had to cut more than $440 million dollars over the past four years. Even when the recession is over, the cuts will continue, because we have a structural problem — expenses largely beyond our control like health care for city employees and utilities like heat, electricity and water, and gasoline for vehicles continue to grow faster than inflation, while our revenue is growing slower than inflation. The shortfall between revenues and expenditures is conservatively projected to average $30 million per year for the next 17 years for the same city you see today, but in reality the need is greater to get services back up to previous levels, catch up on deferred maintenance, and provide services for new residents.
Denver’s budget is highly reliant on sales-tax on physical goods bought from physical stores, but increasingly our economy is made up of on-line purchases we cannot tax without national legal reforms, and by services that we worry about taxing when our neighboring cities do not. And, because of TABOR limitations, property taxes have shrunk from 20% of our budget to 8%, and will continue shrinking unless we act. A “Structural Financial Task Force” has provided recommendations for addressing this challenge to Denver’s future.
The Mayor and Council are committed to doing everything we can to cut costs and find efficiencies in City operations before raising fees/fines or taxes. For example, the Task Force asked Denver to evaluate adjustments to employee retirement calculations and contributions, changes in health benefits coverage, and reduced health care provider options.
But the Task Force agreed that we couldn’t keep the same city we have today without revenue that can grow over time. Removing state TABOR limitations to allow our property taxes to grow naturally with property values and recover what we’ve lost is one powerful opportunity, one I’m interested in because it’s less regressive than other local taxes, especially if paired with a safety valve for fixed income seniors. Other options include: new fees such as trash collection, establishing a dedicated property tax for a dedicated city service, such as libraries or recreation, or a sales tax on services and internet purchases, if we can change state or federal laws. These are all proposals that will be analyzed over the next few weeks after which, the Mayor will be coming to the public for additional input.
Doing nothing is not an option. I’m interested in your feedback on how we deliver the Denver you expect. It’s time to choose your Denver.
Read the full report and recommendations at http://www.denvergov.org/budget/StructuralFinancialTaskforce.
Robin can be reached at kniechatlarge@denvergov.org