Since 2000, Denver’s general fund tax receipts have more than doubled from $64.9 million to $149.7 million, city budgets show. In that time, state tax revenues only increased about 59 percent, according to a Watchdog.org analysis of state budgets.
Despite the city’s skyrocketing tax income, Mayor Michael Hancock is supporting at least two tax votes this year — an extension of the lodging and rental car taxes to renovate the National Western Center and an initiative to increase Denver sales tax to help pay down student college debt.
Hancock has also talked about a possible revenue increase to support more affordable housing in the city though it’s not clear if that will be a tax increase, developer fees, another source of funding or even when that will happen.
Denver’s tax increases represent an average 7 percent annual boost for the general fund and a nearly 6 percent increase overall including school levies. That state’s average annual increase was 3.6 percent.
Colorado Union of Taxpayers president Gregory Golyansky said the average taxpayer doesn’t receive a 6 or 7 percent annual pay hike so he asks why the city should get that largess.
“Given the size of government, there is almost an unfettered ability to plunder those who do not have control of the government,” he said.
Hancock, who Watchdog.org spoke with after a public meeting last week, didn’t want to compare the city to the state tax revenue.
“I’m not managing the state. I’m managing the city,” he said when asked about the differences.
He said Denver residents have one of the lowest tax burdens in the country and that recent increases in revenue are just helping the city get back to staffing levels before the Great Recession.
“We still remain one of the most competitive cities in the state of Colorado in terms of the tax burden on our taxpayers as well as in cities (compared) to Denver in our region,” Hancock told Watchdog.org. “We will always ask the question: ‘What is the burden we’re placing on our citizens and how do we compare to everyone so that we remain appropriate and competitive?’”
Hancock is correct that Denver residents don’t suffer the same tax burdens as many East Coast and Midwest cities.
A 2013 study by the District of Columbia comparing its taxes to taxes in the largest cities in all 50 states ranks Denver in the bottom 20 percent when it comes to combined property, sales, income and auto taxes as a percentage.
But the study also shows Denver’s tax burden falls on the poor, which is important because recent and proposed sales tax increases often disproportionately fall on low-income people. The study said Denver is the 33rd lowest of 51 cities if you have a family of three that makes $25,000 a year. Denver residents making $50,000 or more have the 41st or 42nd lowest tax burden as percentage of income.
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The median single family homeowner in Denver paid $867 in taxes in 2000 and $1,484 last year, accounting for the increase in tax levies and home values, assessor records show. Denver’s sales tax went from 3.5 percent to 3.65 for most goods since 2000 after voters passed a sales tax increase for preschools last year. The state’s portion of sales tax remained steady at 2.9 percent.
Hancock’s staff also sent a statement pointing out the state Constitution doesn’t allow tax increases without voter consent.
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