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Durango City Council must weigh tax question during down tourist season

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Sunday, July 15, 2018 7:33 PM
Durango City Council will likely come to an informal consensus later this month on whether to place a tax increase question on the November ballot. The increase would support core city services, such as street maintenance and law enforcement.

In the middle of a tough tourist season, Durango City Council is considering whether to place a tax increase on the November ballot.

The results of a statistically valid survey, mailed out to residents recently, are expected to guide the councilors’ decision about whether to ask for a tax increase and whether that tax will be a property tax or a sales tax, said Councilor Dick White.

“The most important piece is hearing from the community about what they think and what the priorities might be,” White said.

A tax increase would support core city services dependent on general sales taxes, such as police, street maintenance, snow removal and the Durango Public Library. Without an increase in revenue, those services could face cuts in 2020.

The budget problems are expected to be confined to departments supported by general sales taxes. Water, sewer, airport, trash, recycling, transit and parking operations have separate dedicated funding.

It is possible the tax question could include a menu of options, allowing residents to choose what city services to fund and the dedicated revenue necessary to fund it, he said.

Council is expected to review results of the survey in late July, which is the earliest it could come to an informal consensus about putting a tax question on the ballot.

“I have really tried to stay totally without preconceptions about how this is going to go,” White said.

The 416 Fire hurt business in Durango during the peak tourist season, and community leaders are sensitive to how that is filtering down to residents.

“This may or may not be the right time to put anything on the ballot,” Mayor Sweetie Marbury said.

This year, sales tax collections were stronger than expected through April, said Tim Walsworth, executive director of the Business Improvement District. City records show general city sales taxes were up 3 percent compared with the same period last year.

But sales tax collections are expected to be down in June, a key month for businesses, he said. He said he agreed with Marbury that it might be good to consider the timing of a potential tax question.

“We lost one of the top two months of the year. I think it is good to pause and ask the question, ‘Is it the right time?’” he said.

It may be advantageous for the city to place the question on the November ballot, because if it waits until next year, the question might have to compete with tax questions from La Plata County, Durango School District 9-R and other taxing entities, White said.

It is still unknown whether the city’s question will share the ballot with a statewide sales tax increase to support transportation, which is another important consideration, said Councilor Melissa Youssef. Sales tax inside the city of Durango is 7.9 percent, and it could rise above 8 percent if a state and city sales tax increase is passed.

“We need to look comprehensively at all factors,” she said.

The statistically valid survey is a key piece of guiding the council’s decision, because often the board hears from only the most engaged residents who have the time to attend city meetings, White said.

The survey asks residents whether they would support a sales-tax increase, a property-tax increase, increased fees for services or reducing services.

Residents can also give feedback through the survey on whether basic city services – such as lighting, sidewalk and street maintenance and snow removal – are meeting residents’ expectations.

Those who did not receive a mailed survey can fill out an identical survey online at durangogov.org/vch

mshinn@durangoherald.com

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