Digging for more money to inject into affordable housing, Denver Mayor Mike Johnston is considering asking the City Council to refer a sales tax increase to the November ballot, administration officials confirmed to The Denver Post.
It’s too soon to say whether an affordable housing tax — the amount so far unspecified — will end up on what promises to be a lengthy Denver ballot in this presidential election year. But one council member has already raised concerns about the impact of adding even more layers atop Denver’s existing 8.81% sales tax rate.
Councilman Kevin Flynn, speaking at a meeting of the Safety, Housing, Education and Homelessness Committee on Wednesday, said he has “a serious concern about burdening Denver taxpayers.”
Flynn’s comments came as the committee considered a 0.34% sales tax increase being proposed to shore up the finances of the city’s safety-net hospital, Denver Health. The hospital has struggled to keep up with the rising costs of providing care to uninsured people.
And a consortium of groups headlined by Gary Community Ventures and the Boys & Girls Clubs of Metro Denver last month raised the specter of another potential tax request. The consortium sent a memo to city officials recommending a referred ballot question that would raise the city’s sales tax by 0.25% to pay for after-school programs and youth violence prevention.
That recommendation, however, is no longer progressing through the council’s ballot referral process and will not reach voters this year.
Denver Health’s tax measure would push the city’s total sales tax rate to 9.15% if approved by voters. It passed unanimously out of the committee but will require a vote of the full council to make the ballot.
Flynn, in that hearing, referenced two other sales tax proposals that could raise the city’s rate as high as 9.6%. Reached on Thursday, Flynn declined to comment further. He noted in his committee comments that it appeared that one of those unspecified sales tax measures was not going to move forward this year.
Homelessness and affordable housing have been central focuses for Johnston since his mayoral campaign last year. One of his citywide goals for 2024 is to “permit, secure, finance or support the development and preservation of 3,000 long-term affordable housing units” by Dec. 31.
The city’s stubborn shortage of affordable units is weighing on Johnston’s signature homelessness program, All In Mile High. That effort has moved more than 1,500 people off the city’s streets since the mayor took office in July. Of those, 497 people were living in apartments or other housing units as of Thursday afternoon, but another 776 were staying in transitional housing shelters or micro-communities. Without more capacity to move people up the ladder of housing security, Johnston’s program risks stalling out as some of those people return to homelessness.
In a statement Thursday, Johnston spokeswoman Jordan Fuja focused on the housing needs of seniors and public servants like teachers and firefighters when it comes to the need to create another housing revenue stream. Fuja did not provide a percentage increase the administration might seek if it does pursue a sales tax measure this year.
“Right now, we know that Denver lacks the volume of affordable housing we need to meet our community’s needs,” Fuja said in a statement. “In order to tackle this challenge head-on, we’re exploring all options to fund affordable housing in the city.”
At-large Councilwoman Serena Gonzales-Gutierrez chairs the Safety, Housing, Education and Homelessness Committee. She has yet to see any specifics around a possible housing tax measure, she said.
Asked whether she would support referring such a measure to voters, she responded, “I would like to see the details.”
The clock is ticking for any measure that will require City Council support to reach the November ballot.
Council rules dictate that ballot questions that would not change the city’s charter must be referred at least 90 days before Election Day. That would make the council’s Aug. 5 meeting the last opportunity this year, said Robert Austin, spokesman for the council’s central office. Council President Jamie Torres could move to waive that 90-day requirement, but the latest possible meeting for a referral would then be Aug. 26, Austin said.
The hunt for new revenue streams for city priorities comes at a time when officials and service providers are facing the impending end of COVID-era federal programs that provided massive influxes of one-time cash.
Denver was awarded $308 million through the American Rescue Plan Act, or ARPA. More than a third of that money was allocated to housing and homelessness programs and support, city data shows. All of those dollars must be spent by the end of 2026, according to federal guidelines.
Denver’s current standard sales tax of 8.81% includes portions that go to the state, the Regional Transportation District and cultural facilities. But Dernverites have been more than happy to support increases for specific city needs in recent years. Since 2018, Denver voters have approved six dedicated sales taxes for climate initiatives, homelessness, scholarships, parks, mental health and substance use programs, and healthy food for kids.
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