CITY BUDGET: City government gets just one slice of tax pie

This is the fifth story in a six-day examination of city finances. Tomorrrow's story will look at transit spending.

When it comes to separating taxpayers from their money, Colorado Springs government is just another face in the crowd.

Someone who spends $100 on clothing, forks over $7.40 in sales taxes. Of that, the city gets $2.50. The state government’s haul is $2.90.

Someone who owns a house worth $200,000 in downtown Colorado Springs pays about $945 annually in property taxes. Just $79 of the property tax bill goes to the city government, while $674 goes to Colorado Springs School District 11.

Even relatively low tax payments add up to a lot, though — the city estimates it will bring in about $166.3 million this year including taxes on sales, property, cars, admissions and businesses. And taxes are hardly the city’s only source of revenue. Other money pours in from license and permit fees (an estimated $558,749 this year), grants from other governments ($19.6 million), and payments in lieu of taxes from other government agencies such as Colorado Springs Utilities ($27.2 million).

But tax revenue just isn’t what it used to be. The city has seen steep declines in revenue in recent years and has slashed services in response. Click here to see a breakdown of city tax revenue over the past decade

A proposal to triple the city’s property tax rate, on the Nov. 3 mail-in ballot, would bring in an additional $27.6 million for the city’s general fund next year. The amount is about in sync with the $28.5 million city officials say next year’s revenue would otherwise be down from the 2009 estimate. Nearly $22 million of that deficit is a result of falling tax revenues, which remain the city’s largest source of money. If voters approve the tax increase, it will generate an estimated $46 million annually after it’s fully implemented four years later.

Colorado Springs taxes started declining only recently, along with a slump in the rest of the economy. Sales tax collections in 2007 hit a record high at $157 million. Then the fall started, down to $144.9 million in 2008 and a projected $134.8 million this year. Still, sales tax collections are 14 percent higher than they were at the start of the decade thanks to voter approval in 2001 of a 0.4 percent sales tax to support the police and fire departments. If it weren’t for the Public Safety Sales Tax, the city’s sales tax collections would be 4 percent lower than what they were in 2000.

The city’s property tax is a more stable source of money. Colorado Springs expects to take in $22.5 million from its property tax this year, up from $16.6 million at the start of the decade. The city expects to pay off some debt at the end of this year, which will trigger a small drop in the property tax rate. Someone who owns a house worth $200,000 will save $10.59.

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