A proposed tax on Denver businesses' energy use would only generate a fraction of the revenues that the measure's sponsors have advertised, a Denver city councilwoman said Monday.
Those who pitched the controversial measure have said it would generate about $35 million annually.
But that number doesn't take into account the tax breaks that would be granted to governments, nonprofits and other organizations under the proposal, City Councilwoman Robin Kniech said at a Monday council meeting.
"The realistic amount of funding that this could produce is more in the neighborhood of $10 to $17 million dollars" each year, Kniech said. She urged her fellow council members to vote down the proposed tax and work with city staff on getting better data to put forth an improved version next year.
"We need to have all sectors at the table, and we need to be able to generate more than $10 to $17 million if we’re going to do this," she said. "We need to make it worthwhile."
City Council President Jolon Clark, a sponsor of the bill, acknowledged that the city has limited data to project the revenues, but said the effects of the exemptions won't be "anywhere near" what Kniech found in her independent analysis.
The bill would ask voters to approve a “pollution tax” on electricity for commercial and industrial users at a rate of 0.6 cents per kilowatt. Natural gas usage would also be taxed at a rate of 3 cents per therm for commercial customers and 1.5 cents per therm for industrial customers.
The seven council members sponsoring the bill said the tax would generate about $43 million annually when announcing the measure this month. After the tax rates were adjusted due to a clerical error, that number dropped to $35 million last week. And, on Monday night, it fell again to $30 million when the council approved an amendment to the bill and ballot language.
That money would be used to fund a new administrative office — the Office of Climate Action, Sustainability and Resiliency — that would provide grants and other incentives to help Denver curb its carbon footprint. Those efforts could include training workers for sustainable energy jobs, installing solar panels on homes and businesses, and using electric vehicles.
Supporters of the proposed tax say it's urgently needed if Denver wants to achieve its targets for greenhouse gas reductions in future years and avoid the catastrophic effects of climate change.
"This is something that’s happening today. This is not something that we can wait to take action on down the road," Clark said while urging his colleagues to advance the measure.
For now, the measure has enough support to pass but needs to win the approval of a few more council members to survive a veto from Mayor Michael Hancock, a vocal opponent.
The bill's sponsors — Clark, Candi CdeBaca, Stacie Gilmore, Amanda Sandoval, Amanda Sawyer, Paul Kashmann and Chris Hinds — voted in favor of the bill on first reading Monday night. It's now slated for a public hearing and final vote on Aug. 26.
Council Members Kniech, Debbie Ortega, Kendra Black, Kevin Flynn, Jamie Torres and Christopher Herndon voted "nay."
Flynn was concerned that a tax levied on industrial and commercial property owners, but not residential, would create an equity issue. Others echoed the concerns that the mayor and other opponents of the measure have cited, including that the sponsors didn't get enough feedback from the community.
"A lot of our key stakeholders who will be directly effected were not at the table. And that’s important," Ortega said.
A bill that would create the new administrative office to manage the pollution tax fund also passed on first reading on Monday night.
In other business, the City Council:
• approved a contract with the Caring for Denver Foundation, which will manage a tax revenue fund of about $36 million annually devoted to strengthening mental health and substance abuse treatment programs in the city.
Voters approved the .25% sales tax hike, which amounts to about 25 cents on a $100 purchase, in fall 2018.
The foundation will use that money on resources for homeless people with mental health or substance-use issues to help prevent them from ending up in local emergency rooms or jail because they have nowhere else to go. The revenue will also fund training for law enforcement and a program that pairs mental health experts with officers who are responding to calls involving people with behavioral health problems.
• advanced an urban redevelopment plan for an 80-acre strip of East Colfax Avenue, bounded by Monaco Parkway on the west and Yosemite Street on the east.
The plan doesn't specify any projects but would clear the way for future efforts to be financed with tax-increment financing. That method that allows governments to set aside future sales and property tax revenues that result from of new development to help pay for those projects.
City Councilwoman CdeBaca cast the sole "no" vote against passing the bill on first reading. She said that the projects that typically result from such urban renewal plans perpetuate "crony capitalism" that favors large developers and displaces poor people and minorities from the neighborhoods that reap the benefits.
The plan will go before the council for a public hearing and final vote on Aug. 26.
• advanced a law change, referred to the council by the Denver Department of Public Works, that would prohibit the use of electric scooters on city sidewalks. The measure would require scooter riders to follow many of the same rules as bicyclists, including riding on the far right of a roadway or in designated bike lanes.
• advanced a measure that would require all Denver elected officials to reside in city limits for their entire term in office. If approved, the question will go to city voters.