What does Craig’s tax increase mean for city services, local residents?
November 9, 2017
The City of Craig's sales tax measure eked out a win Tuesday night by an unofficial margin of only 88 votes, or about 4 percent of a total 2,327 voters. The election saw a 37-percent turnout among registered voters in the city.
The win has city officials feeling relieved and ready to tackle a long list of deferred projects and maintenance, while residents and business owners are waiting to see what kind of impact it will have on city services and on their own pocketbooks.
"I know the city is under a microscope," said Kevin Willbanks, co-owner of Craig Powersports. "If they give everybody raises and increase expense accounts, I'm sure people won't be happy, but if they do what they promise to do and make good, confident decisions, I think everybody will be for it."
The 1.75-percent tax increase is expected to generate about $2.1 million annually, effectively resolving a growing budget deficit for the city's general fund. Back in July, Finance Director Bruce Nelson estimated the city would need to raise at least $1.75 million annually to maintain current services and capital needs.
That means there may be a little bit of funding left over for "wish list" projects or amenities — items like a new skate park, dog park or completing Breeze Street park improvements — once the city catches up on several years' worth of capital projects and equipment replacement.
"We're going to do some strategic planning with council," said City Manager Mike Foreman. "We've got to meet our needs going forward, and whatever's left over, what are the priorities of council in our community that we want to address?"
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Though the 2018 budget has been drafted, it's not yet finalized, meaning city council still has the opportunity to add items back into the budget that previously had been axed, something they'll discuss at their next two meetings on Nov. 14 and Nov. 28. Council may also call for a special work session this month to discuss the matter, Foreman said.
“The key thing is citizen participation,” Nelson said. “They need to let the council know if there's something they'd like to see done.”
The sales tax increase won't go into effect until July 1, 2018. The city sales tax rate will then go up from 2.25 percent to 4 percent, which, combined with a 2-percent county sales tax and 2.9-percent state sales tax, will put the combined sales tax rate at 8.9 percent. That will place Craig's rate higher than Steamboat Spring's combined 8.4-percent rate.
For shoppers, the tax increase will translate to an extra $1.75 for every $100 in taxable products or services purchased in Craig.
Richard Tyser, owner of Kester Jewelry in downtown Craig, is less concerned about the sales tax increase driving away business than he is about online retailers.
"I don't think (the sales tax increase) should affect it any," Tyser said. "The only thing that I think about is consumers buying on Amazon (or) online, because that's 9 percent they can save by not having to pay the sales tax. That's the only thing that I'm concerned about."
City Councilwoman Andrea Camp, who campaigned for the tax increase in both the April and November elections, is hopeful the funding increase will allow the city to go after more grant money to further economic development efforts.
"We were missing some opportunities for some grant funding because we really didn't even have the money for the matching funds," Camp said. "This gives us a little room to seek out opportunities and work on economic development."
As for the close call in the election, Camp is aware that council will have to work to earn the trust of nearly half of voters that did not favor the tax increase.
'I think it's important to show we're honest, we're open, and make sure the public is informed and make sure we do a really good job of spending these additional revenues," she said.
Contact Lauren Blair at 970-875-1795 or lblair@CraigDailyPress.com or follow her on Twitter @LaurenBNews.