As voting day nears, some facts and figures behind Craig’s budget woes | CraigDailyPress.com

As voting day nears, some facts and figures behind Craig’s budget woes

CRAIG — It's been 27 years since the City of Craig raised its sales tax rate to generate more revenue for city services.

On Nov. 7, Craig residents have a fateful decision to make on their ballots, one that will set the course of city and local government for years to come.

As Craig residents begin to cast their votes for or against Referred Measure 2A —the city of Craig's sales tax measure — here is some useful information to know.

Nuts and bolts of the tax measure

Craig City Council is asking voters to increase the local city sales tax rate by 1.75 percent, raising it from 2.25-percent to 4 percent. The increase is projected to generate $2.1 million annually for the city's general fund, which funds the Craig Police Department, Road & Bridge, Parks & Recreation and other city departments.

The measure would exempt the lodging industry from the tax increase, as its 13.05-percent tax rate already puts Moffat County higher than most surrounding areas. Hotels are required to charge guests an additional 5.9 percent tax on their bills, on top of city, county and state taxes, due to a 1.9-percent lodging tax and the recently instituted 4-percent Local Marketing District tax.

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The measure also eliminates city sales tax for new car and off-highway vehicle purchases. After voters rejected a tax measure in the spring that would have instituted a use tax on vehicles purchased outside Craig, council opted to do the opposite this time and waive local sales tax on vehicle purchases altogether.

Historical facts about citys budget

The last time the sales tax rate was effectively increased to bring additional revenue into the city of Craig was in 1990, when the rate was raised from 1.5 percent to 2 percent, according to City Director of Finance Bruce Nelson.

In 2001, the city sales tax was raised a quarter percent to counteract the loss of revenue that occurred when Moffat County halved the city's portion of the county sales tax. The building of the Moffat County Public Safety Center prompted the change.

But even after voters approved the quarter percent increase, the city experienced a net loss of approximately $250,000 that year and undetermined losses in years since following the cuts to its portion of county sales tax, Nelson said.

During a 10-year period, both expenditures and revenues have actually decreased for the city of Craig's general fund.

Unlike enterprise funds, such as water and sewer, that have dedicated fees and funding sources, the general fund relies upon local sales tax, which makes up nearly half of all revenue. County tax and property taxes make up the next biggest portion, along with mineral lease and severance taxes, which have taken a nosedive in recent years.

At the peak of the oil and gas boom in 2009, $2 million in mineral and severance tax dollars went to the city. That amount dropped to $790,000 in 2017.

With revenues projected to be a full $2 million less in 2018 compared to 2008, the city has cut 12 full-time positions in the past four years and delayed millions of dollars in capital projects.

"If you look at the cost of goods going up, we could have easily been spending $11.8 million, but we've held it down to $8.7 million, so we really haven't kept up with inflation," Nelson said, comparing the city's expenditures to the consumer price index. "When people say, ‘You've been spending so much money,’ we really haven't. We've been holding the line."

In comparing local sales tax revenue generated per capita, Craig receives $411 to spend towards each of its citizens, compared to $501 per capita in nearby Hayden and a whopping $1,873 in Steamboat Springs, according to data compiled by Nelson.

Contact Lauren Blair at 970-875-1795 or lblair@CraigDailyPress.com or follow her on Twitter @LaurenBNews.