History in Focus: A taxing issue
The current Craig city budget deficits have everyone on edge. The spectre of massive cuts to important services and amenities are forcing elected officials into difficult decisions. In a bid to shore up city funds, the city council will ask voters to increase the city sales tax by 1.75 percent in November, and the history of past sales tax initiatives mirrors our our current situation.
Currently, Craig residents pay 7.15 percent total sales tax, of which 2.9 percent goes to the state government, 2 percent to Moffat County and 2.25 percent to the city of Craig.
Our first sales tax came about during the Great Depression. The New Deal greatly expanded government welfare and work programs, and by 1933, the federal government demanded states pay for a portion of relief programs. In a scramble to raise funds, state politicians tossed around all kinds of ideas; a tax on gas, income, cigarettes, motor vehicles and even alcohol (due to impending repeal of the 18th amendment) were all debated.
However, Moffat County’s very own “Big Ed” Johnson, elected governor in 1933, proposed and played a pivotal role in establishing the first state sales tax. Through 1934, as the debate intensified, Johnson remained committed to the sales tax. Political columnist Neil Kimball tracked the political saga, and on Nov. 1, 1933, he wrote in the Craig Empire Courier, “It is about time they commenced to realize the ‘Big Swede’ (Johnson) from the wilds of Moffat County studies a proposition pretty carefully before he springs it and is generally rather sure of his ground.”
Following almost two years of argument, state Supreme Court decisions and numerous special legislative sessions, the fight came to a head. On Jan. 23, 1935, as reported in the CEC, Johnson addressed a joint session of the legislature and demanded they raise $3.6 million as the state’s share of $18 million in federal funding for New Deal programs, “and declared that every member of both houses possessed a personal responsibility for supplying it.”
“Big Ed” won the battle, and a 2-percent sales tax went into effect March 1, 1935.
In 1986, Craig was reeling from the collapse of speculative oil shale exploration. City coffers were empty, and the Craig City Council faced tough decisions. On April 14, the Northwest Colorado Daily Press reported the city council had to hold off paying “out-of-town vendors” in order to meet payroll and insurance for city employees. Mayor Mike DuBe advised council members to “be judicious” before signing any checks for expenditures.
Throughout April 1986, three forums were hosted at the Fairgrounds Pavilion to gauge citizens attitudes toward a 1.5-percent city sales tax. A grand total of 27 people attended. According to the newspaper, those in attendance favored the sales tax, along with a use tax for cars purchased outside city limits. In return, property taxes would be lowered by two mills and water bills by $4 through the course of a year.
Some citizens questioned the need for both a city police and county sheriff department as a duplication of services, but councilwoman Cathy Nicoletto countered that certain government services, “we cannot get rid of without a vote of the people, which is required by city charter.”
On April 29, the city council approved the sales tax by a vote of 6-1. As for a vote by the citizens, Councilwoman Eleanor Gibbons stated, “I don’t feel that we should risk the future of the city on a public vote on a city sales tax.” However, councilman Chuck Holmgren voted against creating the tax by ordinance, citing a Daily Press telephone survey that “indicated 83 of 100 Craig residents called at random wanted to vote on the issue.”
The economic problems of the 1930s and 1980s shed light on our current malaise and help us realize our situation is not new, but the decisions are just as difficult. The vote on the sales tax is an important juncture for Craig, and it will set the tone and atmosphere of our town for the foreseeable future.
James Neton teaches history at Moffat County High School.
The Dog Days of Summer were on full display this past month, as a variety of concerns pushed stocks and bond yields lower. After reaching new record highs in late July, the S&P 500 Index dropped approximately three percent in August as trade concerns pressured investor sentiment around the world. Impacts of U.S.–China trade tensions reverberated throughout the economy and financial markets in recent weeks, including weakening global manufacturing data and plunging sovereign interest rates.