Denver Sales Tax Increase to Fight Climate Action One Step Closer to November Ballot

Thousands of youth rallied against climate change at Civic Center Park in Denver. Image: Kenneth Hamblin III

This week presumptive Democratic presidential nominee, Joe Biden, released his comprehensive climate plan that puts America on a path to a sustainable, clean energy future. However, throughout the past 3 years under the Trump administration, cities have continued to work diligently to meet their own sustainability and emissions reductions goals.

Just this week, as Donna Bryson reported for DenveriteDenver City Council members moved closer to asking voters to raise the sales tax to pay for making homes and buildings more energy efficient, changing streets to give buses and cyclists more space, investing in electric vehicle infrastructure and taking other steps to fight climate change.

Why This Matters: Previously Denver’s environmental activists pushed the city to become the first major city with a carbon tax (though the initiative fell short), but this most recent sales tax proposal is among several recommendations for raising funds to fight climate change included in a recent report issued by the city’s Climate Action Task Force. The task force is seeking to identify ways to achieve a 40% decrease in Denver’s greenhouse gas emissions by 2025, a 60% drop by 2030 and a 100% decrease by 2040. This tax and others like it could be the financial mechanism needed to see out Denver’s stated climate goals.

The Details: As Colorado Politics wrote, the bill seeks to increase the sales and use tax by 0.25% and invest the revenue into strategies to “reduce carbon pollution and adapt to climate change.”

  • If approved by the full Council in early August, the increase — which is estimated to generate about $36 million in its first year, accounting for the coronavirus pandemic — the sales tax increase would be referred to the November 2020 ballot and left up to Denver voters.
  • The initiative comes from the city’s 26-member Climate Action Task Force made up of representatives from the Sierra Club, Denver Metro Association of Realtors, Xcel Energy, the International Indigenous Youth Council, Denver Streets Partnership and many others.

The Hangups: The proposed tax increase was advanced in a 7-0 vote, but some lawmakers raised concerns that such a sales tax could hurt low-income communities. Colorado Politics also wrote that “others worried that the effort may come across as “tone deaf” to voters, who find themselves in the midst of a crushing financial crisis caused by the coronavirus pandemic.”

However, according to Denverite, Sebastian Andrews, a member of the task force, assured members of the Safety, Housing, Education and Homelessness Committee that other fundraising methods, such as a tax on energy use, would be harder to administer and might be challenged in court.

  • Task force members also said that the sales tax could be calibrated to spare struggling families by exempting essential items and that some of the funds raised would be earmarked for low-income communities.

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