Community Reinvestment Sales Tax-Frequently Asked Questions
By now, hopefully you and your neighbors know the Town will go to the voters April 1 with a proposal to fund community improvements you’ve requested. I’d like to take this opportunity to answer some of the common questions about this “Community Reinvestment” proposal. If you have more questions, please don’t hesitate to contact me, the Mayor or any of the Trustees, or the Town’s Public Information Officer. We want you to have all the information you need to make your decision on this important issue.
What is the problem we’re trying to solve here?
Over the last year, we’ve been working with the community to hear your vision for the future of Estes Park. We held a number of meetings last spring and asked for input through an online poll. The Town has also taken community surveys and facilitated master planning efforts, which were also considered in this vision. From this outreach, you told us these are the three most important issues that need to be addressed, in priority order:
1. Transportation and transit improvements
2. Public trails
3. A Community Wellness Recreation Center, including Senior Services.
In addition, the fires and flood highlighted the need for improvements to our emergency response capabilities, including how we communicate during an emergency and backups for our emergency operations center.
What’s being proposed?
We are proposing an investment in the community’s vision with a 1% additional sales tax for 10 years. Of the collected revenue, 60% will support road improvements. Currently we spend about $435,000 a year on road maintenance. Engineering estimates show we need to invest at least $1.2 million a year for 10 years just to get all our roads up to a fair condition. This is not for new roads, just improving our existing roads – and grants are not available for this purpose.
25% will support the construction of a Community Wellness Recreation Center and the integration of our Senior Center. This will allow us space on Fourth Street to start addressing some needs with the Estes Park Museum. If the Community Wellness Recreation Center does not come to fruition, the funds will be used for much-needed Senior Center and Museum facilities improvements.
12.5% will go for new public trails in the Estes Valley, guided by the Estes Valley Trails Master Plan, in partnership with other agencies.
2.5% will be used for emergency response improvements, such as an AM emergency radio notification system and adding an emergency operations center to space available in the new multi-purpose event center at the Fairgrounds at Stanley Park.
These percentages will be specified in the ballot language — set in stone. Future Town Boards will be prohibited by law from deviating from these uses in these proportions.
Where will we end up with our taxes in comparison to other mountain and regional towns?
It will put our sales tax nearer the upper end for Colorado towns, but not the highest. Aspen, Steamboat Springs, Breckenridge and Boulder all will still have higher sales tax rates than Estes Park.
Won’t higher sales tax keep people away from Estes Park, the last thing we want to do right now?
There is no empirical evidence that an increase in sales tax rate, remaining within the range of other comparable communities, has any impact on visitation. When was the last time you went on vacation and researched the sales tax rate to make your decision on where to visit? Plus, as a community, we have been through a difficult year, and this is a step toward community recovery and sustainability.
Why increase sales tax instead of property tax?
About 66 cents on every dollar of sales tax in Estes Park is paid for by visitors. This is a great deal for Estes residents! Property tax is 100% paid for by residents and can really be a burden on those on fixed income. We have the lowest municipal property tax rate of any Larimer County town. In fact, municipal property tax in Estes Park is an average of 83% less than other towns in Larimer County. Sales tax allows visitors to help pay for improvements that will enhance their visit to Estes Park, and make it more likely they will return.
This is misleading. It isn’t a 1% sales tax, it is a 25% increase in the sales tax. Are you trying to hide something?
No, nothing nefarious here. It just depends on how you crunch the numbers. We are proposing raising the town portion of the sales tax from 4% to 5%. That is an increase of 1%, or 1 additional cent on every dollar purchased, or a 25% increase in the town sales tax rate. The total sales tax will increase from 7.5% to 8.5%. (The State receives 2.9% and Larimer County receives 0.6%)
Why don’t you just reprioritize spending and not raise taxes?
That’s a possibility. We want our citizens to understand exactly how this could affect the services they expect from the Town. We prioritize the budget as it is, and we do operate a lean organization. Our first funding priorities must be the basic mandated services. The gorilla in the room is our streets. We have two choices:
a. Not repair our roads and allow them to continue to deteriorate. This would be irresponsible. Our roads would continue to degrade, affecting both our local residents and our desirability as a tourist destination.
b. Reduce funding for current non-traditional, non-mandated programs.
i. Maintain funding for:
3. Planning and Building
5. Guest Services
ii. Reducing funding for:
1. Community Service Grants to non-profits (budgeted at $137,000)
2. Senior Center (budgeted at $278,000)
3. Museum (budgeted at $329,000)
4. Support to Economic Development Corporation (budgeted at $30,000)
5. Transfers to the Estes Valley Fire Protection District (budgeted at $443,000)
6. Snow plowing on residential streets
Once the Town gets the extra 1%, it won’t give it up. What assurances do we have it will really sunset or you won’t use it for something else?
The ballot language will be very clear. The tax expires and goes away after 10 years. The Town board does not have the ability to override that. Under the TABOR amendment to the Colorado Constitution, the ONLY way to continue the tax would be by another election and approval of the voters. The money will be held separately and accounted for separately, with reports to the community. The percentages in the ballot language are requirements under law. The Town board cannot deviate from these without another vote of the people.
Why not enact a hiring freeze and cut salaries and benefits of Town employees to raise the money?
Like any business, the Town competes for staff and must remain competitive if we are to attract and keep qualified employees. We spent the last year working on a new compensation and classification model. The model is strictly market-based. We compare our salaries to other local governments and companies to which we compete with for employees, and our aim is to hit the middle, at the 50th percentile, for our wages. We’re not the highest and we’re not the lowest – we are average. To make the community improvements on the backs of the employees would be irresponsible and a bad business decision. This would only aggravate job turnover issues and our difficulty recruiting professionals such as police officers, water quality specialists and electric lineman because of the higher cost of living in Estes Park versus other Front Range communities.
The Town has maintained a relatively steady number of full- and part-time employees over the past five years, other than in 2012 when there were many vacancies that went unfilled until 2013. These employees are critical to Town operations, and serve not only the Town residents, but also Estes Valley residents and the millions of visitors to Estes Park each year. While some new, critical positions have been added, other vacancies have gone unfilled whenever possible to keep expenses in check. Though the number of staff is relatively steady, personnel costs have increased as their wages are just now reaching the 50th percentile of the market, and the Town must also keep up with the increasing cost of benefits each year, especially health insurance, to remain a competitive employer of quality employees.
Doesn’t a sales tax increase the burden on low income and fixed income residents for buying necessities, especially food?
This tax would be one penny more for every dollar spent. So a $100 grocery bill would be taxed one additional dollar, at the most, because the State of Colorado already exempts many food products from sales tax. In addition the Town offers a food sales tax rebate each year around tax time in April. Qualified individuals with low income can receive a rebate on their food sales tax paid. The Town considered exempting food from this sales tax, but then the community would miss the revenue at the grocery stores from visitors to the Town as well. This would significantly reduce the amount of funds available to make the improvements citizens are requesting.
In conclusion, we believe there are some real issues we need to address as a community to protect and enhance our quality of life and to remain competitive as a destination. There are many other needs, but we believe this is a reasonable, conservative package to address the priority issues that the community has asked us to address and these are issues that if not addressed by your Town, will not be addressed at all. Please let us know what you think by emailing me at email@example.com, or Kate Rusch at firstname.lastname@example.org, or call us at 970-577-3700.