The Durango City Council on Tuesday considered a variety of options to pay for the city’s transit system, including new taxes and fees.
The Colorado Department of Transportation plans to cut Durango Transit funding incrementally over the next five years, a move designed to give the city time to find alternative funding, said Amber Blake, transportation and sustainability director.
The state budget cuts will create annual deficits for Durango Transit that will increase from $697,523 in 2018 to more than $1.4 million in 2023. Durango Transit would be $4 million in the red by 2023 if the city does not make any changes.
The estimates do not include about $500,000 the city collects in parking fines because it is not a guaranteed source of revenue, Blake said.
If parking fine revenue is stable in 2018, the deficit could be just $27,000, but the city needs to prepare for the larger shortfall now, she said. “We have five years before the cliff.”
Blake asked councilors to consider a half-cent sales tax increase that would generate $4.3 million annually. Most Colorado transit systems are funded by sales taxes.
Councilor Sweetie Marbury said a sales tax would be unlikely to pass, and she could not support it. Several councilors, including Marbury, supported asking voters to reauthorize a quarter-cent sales tax approved in 2005 to fund transit. The tax could bring in $2.15 annually.
Blake also proposed a 3 percent tax on marijuana that could bring in $797,000 a year and a 2 percent lodgers tax increase that could generate $1 million per year. The industry-specific proposals faced opposition because a burden would be placed on just one group.
Increasing lodgers tax would decrease discretionary income tourists can spend in restaurants and retails stores, Councilor Keith Brant said. Blake presented other options, such as adding an unoccupied building fee or leasing city property.
A state sales tax increase for transportation would help, Blake said, but it’s unclear how much revenue it would generate.
Before making a decision, council needs to have a larger discussion with the community, Councilor Dick White said. “What we need to do is have a community conversation that embraces all of these needs and says, ‘Folks what are you willing to pay for?’”
email@example.comThis story has been updated to clarify Transportation and Sustainability Director Amber Blake proposed a 3 percent tax on marijuana and a 2 percent lodgers tax.