LOVELAND – Voters in Loveland will have the opportunity to decide in November whether to increase the city’s sales tax by 1%. There is no expiration date for the increase, nor is there a specific earmarking of revenue from the additional tax.
During a special meeting Thursday afternoon, the Loveland City Council sent the proposal to the Nov. 5 vote by a vote of 7-2, after rejecting by a vote of 6-3 an amendment by Council Member Dana Foley that would have reduced the requested increase to 0.75 percent.
The increase is intended to offset a city budget deficit that city Chief Financial Officer Brian Waldes estimates will be about $13 million a year. The deficit arose because voters last year eliminated a city sales tax on food purchased for home consumption.
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Mayor Jacki Marsh opposed putting the tax increase on the ballot, arguing that “it’s asking for 1% more than we need,” and said some of the deficit would be made up once the tax increment financing agreement for the original Centerra construction project expires in 2029 and normal sales and property tax revenues begin flowing next year.
That 2024 agreement stipulated that for the next 25 years, the city could only charge retailers at the Promenade Shops at Centerra a 1.75% sales tax instead of the usual 3%, allowing Centerra to collect its own 1.25% public improvement fee.
Foley had tried to put the smaller increase on the ballot instead. He had predicted that voters would not approve a larger increase, arguing that the three-quarter cent increase “would get us about where we wanted to be when the grocery tax revenue went away.”
“A little more leeway would be ideal,” he said, “but I don’t think that will get us across the finish line.”
However, the majority of council members supported the motion. Mayor Jon Mallo stated, “I have not heard anyone say that 1% is not the right direction.”
Thursday’s special meeting was scheduled during Tuesday night’s regular council meeting when City Attorney Vincent Junglas raised a problem with the publication of a legal notice on the issue.
The sales tax vote joins three other issues the city passed Tuesday night. On Nov. 5, voters will decide whether to allow marijuana dispensaries outside residential areas in Loveland, whether to make it easier for the City Council to hire or fire a city manager or city attorney, and whether the city can keep excess revenue for police, fire, parks and infrastructure.
