As Colorado withers under wildfires in a year anticipated to be the state’s third-driest on record, its Capital city is attempting to curb the culprit that climate scientists for decades have said is leading to bigger blazes, hotter temperatures and more disastrous droughts: greenhouse gas emissions.
First, however, Denver is looking to voters this November to greenlight 2A, a 0.25% sales tax increase that would fund hundreds of millions of dollars in programs aimed at reducing the city’s climate footprint. Half of what's raised would be dedicated to climate projects directly affecting marginalized and low-income communities, which have been disproportionately impacted by climate change.
Funds would also be funneled into programs that support clean energy jobs, phasing out the use of natural gas in new buildings, solar power investments and sustainable transportation.
The tax is expected to raise at least $36 million annually, according to the Denver Climate Action Task Force, which calculated the tax. The goal is to move the city closer to its target of achieving a 40% decrease in greenhouse gas emissions by 2025, a 60% drop by 2030 and a 100% decrease by 2040.
“Nothing about solving the climate crisis will be easy, but this is a case where Denver residents will have something in front of them they can do,” said District 7 Councilman Jolon Clark, who worked with the task force.
In 2018, about 62% of Denver voters approved an environmental tax, one of only a handful across the country, that infused tens of millions of dollars into the city's budget to invest in more green space, including parks and trees, particularly in disadvantaged areas that experience higher temperatures from a lack of natural landscapes. However, by the end of this year, the New York Times reports that the city will have allocated six times the amount of trees downtown, in its central business district, than in residential areas.
This year, politicos from the left and right suspect Denverites may not be so generous.
For one thing, it’s not the only local sales tax hike proposed on the ballot, which some critics worry could come across as “tone deaf” to voters, who find themselves in the midst of a crushing financial crisis caused by the coronavirus.
Voters will be asked whether to raise taxes equally as much, by 2.5 cents on a $10 purchase, to tackle homelessness. If both pass, the city’s sales tax rate would reach 8.81%, making it one of the higher rates in the area. Food, water, fuel, medical supplies and feminine hygiene products would be exempt from both taxes, and neither would sunset.
Another issue, opponents argue, is that the sales tax is regressive, meaning everyone, regardless of income, pays the same amount of sales taxes.
“The environment is a really important issue to me in my heart … but I cannot support a regressive tax like this that unjustly puts the burden on lower-class Americans,” Denver resident Alexis Morris said in a public hearing on the measure, arguing that the tax should be shifted to the biggest polluters.
Roughly 9 million metric tons of greenhouse gas emissions are produced annually in Denver, the task force estimates. Pollution from buildings and homes represented nearly half of the city’s 2018 greenhouse gas emissions. Transportation was the second-largest source, responsible for 30% of emissions.
“We’re asking too much from our voters right now,” said District 2 Councilman Kevin Flynn, who plans to only support the homeless resolution tax and was the lone council member against referring the issue to voters. Raising revenue for climate action through a sales tax is not the “appropriate way,” he said, but rather the “easy way out.”
A recent paper by the Bell Policy Center shows that Colorado over the last three decades has increasingly relied on regressive taxes that hurt low- and middle-income families.
“The regressivity of Colorado’s tax code builds upon and exacerbates long-standing racial inequality,” the report states. “An overreliance on sales tax has a cumulative negative effect on Coloradans of color, as they are often less likely to own homes and spend more of their income on items affected by sales taxes.”
Because of Colorado’s tax code structure — specifically the constraints imposed by the Colorado Taxpayer’s Bill of Rights, an anti-tax constitutional amendment OK’d by voters in 1992 — most cities only have two tools to work with to boost their budgets: sales taxes and property taxes.
Still, Flynn and others say they would have rather moved forward with the climate advocacy group Resilient Denver’s ballot measure that would have generated cash for green initiatives by raising utility bills based on energy usage.
That measure was sponsored last year by Clark but met with opposition from Mayor Michael Hancock and business groups. As a compromise, the city established the new office of Climate Action, Sustainability and Resiliency and convened a 26-member task force that worked with Clark to come up with the new ballot measure.
District 9 Councilwoman Candi CdeBaca voted to refer the new measure to the ballot out of respect for voters, but she wasn’t pleased with the policy.
“It’s really disappointing that we took a whole year to get to a sales tax, considering what we started out with,” she said, referring to the Resilient Denver initiative, which has since been pulled from the ballot. “I thought that was more courageous — more complex — but definitely more courageous, in shifting the burden to our commercial and industrial users.”
Clark and task force members say the sales tax is but a starting point, a mere piece of the $200 million annually and $3.4 billion overall they estimate needs to be raised to put up a fair fight. Other steps may include implementing a vehicle efficiency fee and raising parking meter and parking permit fees.
The Denver GOP opposes the ballot measure because it is a “substantial tax increase for unspecified programs.”
The measure was approved unanimously by the task force, which includes representatives from Resilient Denver, Sierra Club, Denver Metro Association of Realtors, Xcel Energy, the International Indigenous Youth Council, Denver Streets Partnership and others.
The investment cost of a few billion dollars pales in comparison, the task force says, to the roughly $20 billion they estimate could be incurred from inaction.
“Every day that we wait, the price tag on this goes up higher and higher, and the threat to the most vulnerable communities in our city goes up,” Clark said.
Task force member Dominique Gomez echoed Clark as she highlighted the parallels between environmental injustice and the coronavirus pandemic.
“If there is any lesson from six months of COVID-19, it is that prevention and early investment is way better than trying to address the fallout of failing to act,” she said. “We also know that our Black, Latino, Native American and low-wealth communities will be disproportionately impacted by climate change and already are today by heat, by air pollution” and even the coronavirus. “Failing to act — and act decisively — will, more than anything, fail those communities.”
District 6 Councilman Paul Kashmann agreed the sales tax is “the right way to go.”
“It's an essential step in preparing Denver to remain a viable city in the future and doing our part to solve this problem. We can't solve the world's problem. But this is an opportunity for us to lead."