Denver voters will decide in November whether to raise the city's sales tax by .25 percent, with the money earmarked for homelessness services. At its August 24 meeting, Denver City Council voted unanimously to put the sales tax initiative on the ballot.
"Denver residents want to make a difference for those who need help getting back on their feet. With voter support, these funds will allow our community to do just that, by investing in proven solutions and meeting more of the need that is outstripping our current efforts," said Councilwoman Robin Kniech, who'd sponsored the ballot referral initiative, in a statement after its passage.
Major homeless service providers, including the Colorado Coalition for the Homeless, have been pushing the sales tax initiative as a way to help Denver's growing homeless population. It has the support of Mayor Michael Hancock, too. “Together, we’re pulling every lever available to help people and ensure that episodes of homelessness are brief and one-time occurrences,” Hancock said in a statement of his own.
If passed by voters, the sales tax increase will generate up to $40 million annually, which will go toward funding existing shelter options; creating more low-income housing, such as tiny homes; and helping those experiencing homelessness navigate through housing and services systems.
"I think one of the gaps here is, we have some resources that do help with sheltering, housing and outreach, but there may not be dedicated resources to that purpose," explains Laura Brudzynski, deputy director of operations at Denver's Department of Housing Stability.
In 2020, the Denver budget dedicated $98 million to housing and homelessness. But Brudzynski and other city officials say they need more money to chip away at Denver's rising homelessness numbers.
If the tax is approved, during the first year of funding, the city and service providers plan to continue expanding 24/7 sheltering options, a model explored at the temporary auxiliary shelters set up at the National Western Center (now closed) and the Denver Coliseum. "We’ve heard folks report that they are feeling more rested because they have 24/7 access to a bed. They have access to more food options. They're feeling less anxious," Brudzynski says.
While homelessness is not a new issue for Denver, it's definitely growing, with encampments popping up all over town. For much of the pandemic, city officials have largely opted not to clear out the encampments, in accordance with guidelines from the Centers for Disease Control and Prevention that recommend keeping such camps in place to prevent the spread of COVID-19. Over the past few weeks, however, the city has swept large encampments in Capitol Hill and Five Points, citing deteriorating health and safety conditions. Many of those who were displaced moved from one spot to an encampment a few blocks over, while some have been pushed further along, including into neighboring cities.
Homeless numbers were already on the rise at the beginning of 2020. The Metro Denver Homeless Initiative's 2020 Point in Time Count, taken in January, indicated that there were 4,171 homeless individuals in Denver, as well as almost 2,000 more in Jefferson, Douglas, Adams, Arapahoe, Broomfield and Boulder counties combined.
The homeless sales tax initiative has the backing of the Downtown Denver Partnership, which had helped fund the fight against Initiative 300, a May 2019 ballot measure that sought to revoke laws that advocates viewed as criminalizing homelessness, including the urban camping ban. The campaign against I-300 had used the tag line "We Can Do Better"; now those pushing the tax proposal are trying to show that this is one way to do so.
"There is definitely a continued need for resources," says Tami Door, CEO of the Downtown Denver Partnership. "We believe this dedicated funding stream is another piece of the puzzle."
Why increase the city's sales tax when the economy is already in crisis? "It’s ultimately more expensive when we don’t deliver impactful solutions to homelessness," replies Door. "When we don’t have an individual in housing or getting the resources they need or in shelter, the overall expenses from both the public and private side continue to grow per that individual."
For Kniech, a sales tax increase made more sense than a property tax increase, which would hit small- and medium-sized businesses harder than households because of the Gallagher Amendment, which limits the percentage of property tax income that comes from homeowners. "For the median household here in Denver, a property tax and a sales tax would probably have cost the same," Kniech notes.
Denver City Council has also referred a proposal for a .25 percent sales tax to fight climate change to the November ballot. If both proposals pass, the result would be an extra five-cent tax on every ten-dollar purchase. According to the city's analysis, the two would cost the average Denver household around $10.50 a month. Denver's local sales tax would become 4.81 percent, combining with regional and state taxes for a total sales tax of 8.81 percent...high, but still lower than in some other local municipalities.