To ensure a more sustainable funding structure, the City of Colorado Springs should consider implementing new taxes and fees, extending or increasing existing taxes and fees, reducing existing tax exemptions, and augment or modify the way it provides services.
Those recommendations, and others, will be presented to the City Council this afternoon by the Sustainable Funding Committee, which has completed a 300-page report about the city’s finances.
The committee recommends that City Council consider the following new taxes/fees:
- Employment tax/fee
- Vehicle registration fee for transportation expenditure purposes
- Medical emergency response fee
The revenue subcommittee is proposing that council consider an employment tax/fee of $5 per employee per month. Members did not specify whether the tax/fee would be paid by employers or employees.
According to the report, Denver levies an “occupational privilege” tax for $9.75 per month for each employee ($5.75 is paid by the employee and $4 is paid by the employer). Sheridan levies $3 per month, Aurora levies $4 per month and Glendale levies $5 per month.
The subcommittee estimates that the tax/fee would raise about $12.7 million during 2010, and that revenue would grow about 1.6 percent per year to $13.5 million during 2014.
To help supplement the city’s transportation revenue, the subcommittee also is proposing that City Council consider a $10 or $20 per year vehicle registration fee.
The medical emergency response fee would provide reimbursement of fire department costs for medical emergency response.
According to the report, American Medical Response currently bill patients for the costs of their services. The company’s base rate for advanced life support transport is $622.82 per transport. Any additional fees would be added to this total.
The report says that a $25 reimbursement for the fire department was considered during contract negotiations with AMR, but was not implemented.
The SFC also is recommending that the city consider the following extensions/increases of existing taxes/fees:
- Increase the lodging tax from 2 percent to 4 percent
- Increase the auto rental tax from 1 percent to 3 percent
- Extend sales taxes on goods, currently 2.5 percent, to services purchased by the general public, not businesses
- Increase the property tax, currently 5 mills, by 1 mill to 5 mills
- Increase the sales tax on alcohol from 2.5 percent to 3.5 percent or 4.5 percent
- Increase sales tax on restaurant purchases from 2.5 percent to 3.5 percent
- Extend the sales tax to cigarettes
- Extend sales tax to cell phones
The committee further recommends that the city eliminate sales tax exemptions for nonprofit organizations, except for 501(c)(3) organizations.
The committee also is advocating that the city augment or modify the way it provides services. Its recommendations include:
- Encouraging efficiency
- Encouraging innovation
- Consolidating services
- Outsourcing and or/managed competition
- Charging for full cost of providing services
- Greater use of volunteers
- Additional use of technology to reduce costs/improve service
- Using special districts
- Addressing the capital needs backlog
A subcommittee also examined the city’s assets and enterprises to determine their role in long-term sustainable funding and how they might best be monetized.
The SFC is recommending the following actions:
- Colorado Springs Utilities – Altering the governance model of CSU is recommended, along with the adjustment of utility rates over time to a market index in order to provide additional funding for the city.
- Memorial Health System – Further study of options to change the governance and ownership of MHS are recommended.
- Parking system – Continue operations as is, while considering a sale to downtown quasi-governmental interests.
- Colorado Springs Airport – Continue aggressive management for economic development purposes. Do not seek a pilot program. Seek creative enhancement for returns to general fund.
- Cemetery operations – Seek a management contract that will expand services offered and compete in the industry for a return to the city.
- Patty Jewett Golf Course – No change.
- Valley High Golf Course – Seek privatization opportunities that will increase revenue to the city through long-term leases or management contract.
- Human Services Complex (Golf Acres) – No change
- Pikes Peak Highway – No change
The SFC’s report is available at www.springsgov.com/CCBIndex.aspx?CCBID=19.