A sales tax bump to fight the climate crisis gets some space on Denver’s November ballot

And it’s still not enough, decision-makers say.
6 min. read
Denver’s air quality is visibly not great on Aug. 20, 2018. (Kevin J. Beaty/Denverite)

Denver's Election Day ballot got thicker Monday after city council referred a climate change sales tax to voters.

If voters OK the tax on November 3, residents and visitors would pay 0.25 percent more, or 2.5 cents on every $10, for most items they buy. In exchange, proponents said, Denver would get cleaner air and relief from the effects of global warming like health problems, hotter temperatures, drought and flooding.

The legislative body passed the question onto city residents by a vote of 11 to 1, with Councilman Kevin Flynn dissenting.

The Climate Action Task Force, a body appointed by Mayor Michael Hancock to map out the city's climate change response, recommended the tax to council. They think it will raise about $36 million a year, a lower sum than originally thought because of the economic downturn caused by the COVID-19 pandemic.

Much of that money would fund infrastructure and incentives that make Denver's homes, buildings and streets more energy-efficient. For example, officials envision retrofitting buildings to emit fewer greenhouse gases while incentivizing cleaner energy sources like solar. They also see car-first roads becoming multi-modal streets that prioritize buses -- from a carbon-free fleet -- as well as bikes, electric bikes and electric cars.

Pollution from residential, commercial and industrial buildings is the main ingredient in a cocktail of greenhouse gases that trap the sun's radiation in the city, according to government documents. The transportation industry, including fossil-fueled cars, trucks and airplanes, is the second-largest contributor to climate-changing greenhouse gases.

Some say a sales tax is not the way to go because it will disproportionately burden people with less money.

A sales tax is what numbers people call "regressive" because everyone pays the same rate for the same thing, regardless of the buyer's income. So while the tax is equally applied, it is not equitably applied. While wealthy people might not notice it, those with fewer means will, said Alexis Morris, a young resident who spoke at the city council meeting Monday.

Denver's sales tax is currently 4.31 percent. Because Denver is part of the Regional Transportation District, another 1 percent is charged for RTD. And because it's part of the Scientific and Cultural Facilities District, another 0.1 percent is charged for SCFD. The state sales tax of 2.9 percent brings the total to 8.31. If voters approve this increase and a separate measure for homelessness, sales tax on most items in the city will ring up at 8.81 percent -- five more cents for every $10 spent.

"I cannot support a regressive tax like this that unjustly puts the burden on lower-class Americans," Morris said. "A sales tax negatively affects the people at the lowest bracket of income, more than it does the upper bracket. However, the people who produce consistently more carbon emissions are people of upper class."

Flynn agreed and voted against the measure. But he framed his decisions as a vote against inequity, not against curbing climate change.

Denver would be "settling" for a regressive sales tax, Flynn said. He supports a separate sales tax measure to help the city's unhoused residents because people with money would be helping people without it, he said. Flynn said the climate tax measure would be "asking too much from our voters right now."

"That doesn't mean that I oppose the efforts that it would be used for," he said.

Councilwoman CdeBaca supports giving voters the choice but said she disagrees with the sales tax approach for similar reasons. A spokesperson for Hancock's office said the mayor supports the voters' right to decide.

Last year, Denver City Council floated a carbon tax that would charge building owners based on the amount of energy they used, aimed at divvying up the burden more equitably. Legislators dropped that bid when Mayor Hancock, who didn't support the measure, agreed to create a climate office and launch the very task force that floated this sales tax. Now supporters of the original measure, including Councilman Jolon Clark, who sponsored the early attempt, say the sales tax measure is a better route.

Also: A third carbon tax is currently on November's ballot, but activists with Resilient Denver said they will nix it now that the council referred this measure.

Supporters of the measure point to language in the bill, meted out by the 26-person task force over six months, aimed at building fairness into the tax.

The measure states half of the money raised "should, over the long term, endeavor to invest fifty percent (50%) of the dedicated funds directly in the community with a strong lens toward equity, race and social justice."

Over the years, investments could equate to some $20 billion in savings and economic development by averting the negative effects of climate change while shifting the city to a new, greener economy, according to the task force's report. And people with less money stand to gain from that shift, supporters said Monday.

"In every consideration I witnessed, the climate task force prioritized Denver's marginalized and disproportionately impacted communities," said Parry Burnap, a longtime Denver climate activist with expertise in policy. "Economic opportunities that will open up as Denver mobilizes to take climate action will be targeted at these front-line communities. They will be the first to receive the support (and) to prepare for and adapt to challenges as droughts, extreme weather events, wildfires and heat waves that increase in frequency and intensity."

Food, water, fuel, medical supplies and feminine hygiene products would be exempt, the bill states.

If voters pass the sales tax, it still only gets the city part of the way. The solution must include policy changes, Councilwoman Robin Kniech said.

The city government has several plans to tackle climate change. The latest edition recommends this sales tax and many, many other things. For example, members recommended a policy that forces all commercial buildings recycle and compost. A "pay as you throw" program -- something the Hancock administration has talked about for years -- that incentivizes composting and discourages throwing out food, is also on the list.

"The sales tax is a source of revenue, and it's not really related to behavior change," Kniech said, adding that she wants to ensure those policy conversations -- not just revenue conversations -- translate to reality, too.

Supporters like Clark emphasized that a sales tax is just a starting point and in no way will fund all the needed changes.

Members of the task force know that $36 million a year is not enough to stop a global force that threatens life as we know it. Their plan calls for $73 million in revenue raised in part by the bump and in part by changes to things like meter fees downtown, which transportation officials have said are priced lower than the market demands.

And even the figure task force members chase in their plan falls short of the money Denver needs to battle the crisis, said Thomas Riggle, a member of Resilient Denver who sat on the task force. We need around $200 million annually to fight the war, he said, citing a figure from task force discussions.

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