Durango residents generally support a sales tax increase over a property tax hike to address the city’s long-term budget needs.
The results of a statistically valid survey found that 58 percent of respondents supported a sales tax increase and 33 percent supported increasing the property tax. The survey also found that more than 50 percent of respondents supported increasing fees and cutting services to address the problem of rising expenses.
The 401 residents surveyed could select multiple options for addressing city budget needs, according to survey results.
On Tuesday, Durango City Council reviewed the results of the $12,000 survey and discussed possible options for a tax increase. They did not come to a consensus on a possible tax increase to place on the November ballot but may agree on a tax proposal in August.
The city needs to raise an additional $8.6 million to $10 million per year to address long-term operational and facility needs, Assistant City Manager Amber Blake said.
“No council wants to be coming back and asking again and again,” she said of tax increases.
The additional revenue would support core services, such as police and street maintenance currently funded by general sales taxes. Services such as water, sewer, trash and recycling are paid for through monthly utility bills.
The survey found 80 percent of those surveyed would support a tax increase for street maintenance, infrastructure, police services and facilities and library operations. Thirty-eight percent would support a sales tax increase, 36 percent would support a property and sales tax increase and 6 percent would support a property tax increase.
A fifth of those surveyed did not support a tax increase.
When asked specifically how much of a tax increase residents would be willing to support, the options that included a sales tax increase were the most popular. A 1-cent sales tax increase garnered 43 percent of the vote among those surveyed.
A combined half-cent sales tax increase and an 8 mill property tax increase captured 30 percent of the vote.
A 1-cent sales tax increase would raise about $8.3 million a year. Shoppers would pay an additional $1 in taxes on a $100 purchase. A half-cent sales tax increase would raise about $4.15 million and shoppers would pay an additional 50 cents on a $100 bill.
If voters increased property taxes by 8 mills, that would raise an additional $4.35 million a year. The owner of a home with an assessed value of $350,000 would pay $222 more a year.
Councilor Dick White suggested asking for both a property tax increase and a sales tax increase.
The property tax increase would provide stable revenue for public safety costs, including the city’s contract with the Durango Fire Protection District and a new Durango Police Department station.
The city currently pays for fire protection with a combination of property tax and sales tax revenue.
A sales tax increase could be a way for all visitors and residents to share the cost of street maintenance, he said.
“The argument that there ought to be some sharing of those costs with the users, I think is a very strong argument,” he said.
Mayor Sweetie Marbury asked city staff members to provide more detail in August about what could be cut from the budget and what new fees could be introduced to support existing services.
“Half the people said belt-tightening needs to be part of the picture,” she said.
She also asked staff members to gather more feedback from local business owners about a possible tax increase.
Marbury said a sales tax increase might make local businesses less competitive.
“Protecting our stores in Durango is certainly important to me,” she said.