City of Aspen contemplating how much cash to give residents
February 11, 2018
Aspen City Council members have varying viewpoints on how to handle a proposed increased for food tax refunds that go to residents each year. Some think it should be much more than the recommended $5 increase, and others think it should stay at the current $50 a year.
Mayor Steve Skadron said because it's a regressive tax, it should benefit those less fortunate — not just to give money away.
"I think this is going entirely the wrong direction," he said at a Jan. 22 meeting. "It makes more sense to give a food tax credit to the low-income families or individuals than it does to reduce this tax, or giveaway, for all in the community. I'm not going to support this."
The council is poised to vote on the issue tonight during a public hearing. At their meeting last month, elected officials debated the issue after Aspen resident Mike Maple suggested that they are not abiding by voter intent or the letter of the law when the tax was established in the 1970s.
At the time, voters approved a 1 percent sales tax, which applied to food purchases. Because many cities in Colorado have long exempted food purchases from their sales tax, Aspen officials in 1970 decided to leave the tax on but refund a fixed amount per person who had lived in the city the previous year. The refund at the time was $7.
In 1972, voters approved raising the sales tax to 2 percent, resulting in the refund amount tripling to $21. That tax hike also was to pay for food-tax refunds as well as land acquisitions, capital improvements, general operating purposes and other purposes, city records show.
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The refund was raised to $39 in 1981 and $50 in 1998. And now the proposal from the city's finance department is to raise it $5 for city residents, and an additional amount given to seniors from $100 to $110. The cost of these changes would be approximately $17,000, according to a memo from City Finance Director Don Taylor.
Currently, the city doles out $170,000 a year in refunds.
Maple suggested that the tax should be adjusted annually for inflation.
Councilman Adam Frisch said that's one option. Another is to increase it $5 as a goodwill gesture, and the third way is to figure out the true cost of the average local's food bill and zero it out with a refund.
Taylor told council in January that the average person here spends $210 a month on groceries, and a $55 refund is a fair amount.
"By my math, most people get more money back than they spend in sales tax in the city of Aspen for groceries," he said.
Councilman Bert Myrin thinks the calculation should be put on autopilot so that the refund cancels out the tax. One way to do that is match it to something else council adjusts according to the cost of living — like the city manager's compensation.
"A 20-year cycle with a $5 adjustment doesn't make sense to me," he said at the Jan. 22 meeting. "If we did that to the city manager, we would have no city manager."
Myrin then suggested having City Manager Steve Barwick's pay be the index for the food tax refund.
Barwick's hourly rate in 1999 was $43.27. Last year, it was $88.97. That does not include bonuses or his benefit packages.
None of Myrin's fellow council members supported the suggestion.
At the Jan. 22 meeting, Councilman Ward Hauenstein didn't offer an opinion other than to say he wants to consider Maple's previous comments to council that the refund is paltry and an insult to taxpayers.
Councilwoman Ann Mullins asked Taylor to bring back more details on how much it costs in staff time to administer the food tax refund program.
Skadron said the refund money comes from the general fund, which pays for recreational programs, health and human services funding, arts programs and many more amenities that make Aspen a great place to work and visit. And that's why he doesn't support any increase.
"It's these kinds of (amenities) that deliver the five-star community we love," he said. "This is not an inconsequential thing."
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