Loveland’s sales tax issue passed on the second attempt, but it took a lot of discussion to get there. At Tuesday’s meeting, the City Council approved a ballot proposal that would ask voters to raise non-food prices by 1%, although questions remain about how the city will spend the money.

“I’m going to advocate for this to be put on the ballot and let the voters vote,” said Councilwoman Erin Black, who originally voted against the issue. “I’m going to do my best during the rest of my term to not give away these taxpayer dollars to rich developers.”

The City Council has been discussing a possible increase in the sales tax on non-food items for several months to fill a $10 million to $13 million budget gap for next year, created in part by the elimination of sales tax on food for personal consumption. If that gap is not closed, the city is poised to cut $12.2 million from the 2025 budget, with most of the cuts coming at the expense of “public” services such as the library and parks.

After several study sessions, most recently on July 23, there seemed to be consensus to ask voters to raise the local tax rate from 3% to 4%. However, in a surprise move, the City Council narrowly voted against the measure last week.

Then members began to have concerns, especially after supporters of the increase continued to plead their case via email and phone. On Thursday, Councilman Dana Foley was convinced and formally asked his colleagues to bring the issue back for reconsideration.

Several city councilors thanked Foley for the request on Tuesday, including at least one with whom he had clashed in the past.

“Foley, write that down because I don’t know if I’ve ever said it and I don’t know if I’ll ever say it again, but I appreciate you bringing it up again,” said Councilman Troy Krenning.

“…It is an important issue and I was extremely disappointed, as I expressed in emails following our walkout last week. I felt like we had delivered a gut punch to our staff, the public and our members of the Citizen Finance Advisory Commission,” Krenning continued.

The rest of the discussion, however, was not quite as cordial. Mayor Jacki Marsh still had reservations about a tax increase because Loveland voters had repeatedly voted against it and because the city had been too generous with development incentives, she said.

“I firmly believe that future councils will give away more money if they are given more money,” Marsh said. “So for me to agree to this, it has to include language that says that … in the event that the City Council approves any new abatements, credits or diversions, the sales tax increase will be terminated if the Council votes to do so.”

Although several members were sympathetic to the mayor’s anti-incentive stance, none were in the mood to engage in a conversation Tuesday. Marsh also faced backlash for her claim that Loveland voters would inevitably reject the measure.

“I have to respectfully disagree with you, Mr. Mayor, when you say, ‘Well, that’s never worked in the past, so we can’t do it now,'” said Councilwoman Andrea Samson. “…To make our constituents’ decisions for them before we give them a chance to vote is not only not our job, it’s undemocratic.”

The debate was temporarily halted to consider an amendment by Foley to increase the rate from 1% to 0.75%, which he believed would be more acceptable to voters. Marsh and Black both supported this proposal, but he was unable to gain a majority for it.

Although there was also discussion about potentially suspending the increase or earmarking the money, the council ultimately voted 7-2 for language calling for a permanent 1% sales tax increase. Black, Foley and Councilman Pat McFall changed their votes from last week. Marsh and Councilman Steve Olson, who both saw two failed sales tax initiatives during their time in office, repeated their no votes.

Afterwards, Eric Rock, a longtime Loveland resident and one of the most vocal supporters of the increase, said it was important for Loveland residents to have their say on this critical issue.

“We have a city like no other,” Rock said. “The worst thing we could do is let it fail and remove the services that people count on. As a resident, as a homeowner, as someone who grew up in Loveland, my love for the city is greater than that fear of failure.”

Originally published: August 14, 2024 at 7:28 am