Denver’s city councilmembers are in disagreement over a proposed sales tax increase that could potentially make Denver one of the local governments with the highest sales tax rates in the Front Range. The proposal, introduced by Mayor Mike Johnston, aims to increase the sales tax by 0.5 points in order to generate $100 million in revenue for affordable housing.
The councilmembers have introduced more than 10 amendments to the measure, with debates focusing on how the revenue should be distributed among different income brackets. Councilmember Shontel Lewis introduced an amendment to limit spending to benefit residents earning 80% or lower of the area median income, sparking a contentious discussion among councilmembers.
Some councilmembers argued that the tax hike should target the “missing middle” segment of housing, while others advocated for a focus on those making 0-30% of the AMI bracket. Ultimately, Lewis’ amendment was voted down, and the council is moving forward with further discussions and amendments to the tax hike proposal.
The tax hike must appear before the council twice before being sent to the voters for approval. If approved, the tax hike, along with another proposal to fund Denver Health, could generate close to $200 million annually, making Denver’s sales tax rate the highest in the area. The Metro Denver Chamber of Commerce has expressed support for funding critical services, while the Downtown Denver Partnership sees both measures as important to support the city’s growth and competitiveness.
The proposal has garnered mixed reactions from local residents and experts, with concerns raised about the regressive nature of sales taxes and the potential impact on lower-income residents. However, supporters argue that the tax hike would capture revenue from tourism and provide funding for essential services and housing initiatives.
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