Aurora Considers COVID Funds for Homeless as Marijuana Taxes Fall | Westword


Aurora Considers COVID Funds for Homeless After Marijuana Shortfalls

The city's steep decline in marijuana revenue reflects a statewide issue.
A campsite next to a wall that separates Interstate 225 from a residential road in Aurora.
A campsite next to a wall that separates Interstate 225 from a residential road in Aurora. Bennito L. Kelty
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Aurora City Council could turn to federal COVID-19 relief money to temporarily replace steep declines in local marijuana tax revenue that has traditionally been used to fund homeless service organizations and rental support.

After generating over $3 million for such services in 2022 and 2023, marijuana tax revenue allocations are expected to decrease by over 50 percent next year, according to Aurora officials, with just $553,000 available through other grants. The anticipated drop in pot money has forced organizations such as the Aurora Housing Authority, Aurora Mental Health and Recovery, Mile High Behavioral Health Care, Colorado Safe Parking Initiative, Restoration Christian Ministries,  Salvation Army and others to look for alternate routes of funding, with little time left in the year.

Salvation Army locations on Chambers Road and Peoria Street, both of which provide overnight shelter, requested $500,000 in funding from the city in 2024, but will have to split around $180,000 under the revised budget, according to the Aurora Homeless Behavioral Health, Housing and Community Services department. With less than $2 million in funding currently available and eleven different agencies and organizations asking for a total of $5 million next year, the Salvation Army wasn't alone in receiving the bad news.

Mile High Behavioral Health Care, which provides food and housing support at the Aurora Day Resource Center, previously got around 75 percent of its funding from Aurora, according to the organization, collecting approximately $2.4 million in 2023. Next year, Mile High Behavioral Health Care is slated to get around $960,000.

According to Melissa Mejia of the Community Economic Defense Project, a nonprofit that provides rental assistance, legal representation and other resources for people facing housing insecurity, there have been over 35,000 eviction filings in Colorado so far in 2023. Mejia, who spoke at an Aurora City Council meeting on November 27, wants a clear bridge of funding for housing services as the marijuana industry attempts to rebound.

"We know [evictions] are only increasing in Colorado and the metro area. This problem is not going to get smaller. It is growing," she said.

Around 2 percent of Aurora's 7.75 percent marijuana sales tax is earmarked for homeless services, and that once went a long way. In 2017, the city used $900,000 of its pot-tax revenue to turn an old police department gym into a homeless shelter — the same one where Mile High Behavioral Health Care operates today. Two years later, Aurora built a $41.9 million city recreation center, funded entirely by marijuana taxes. But then Colorado's marijuana industry began falling — after surging upward during the COVID-19 pandemic.

Recent economic forecasts from the governor's office indicate that marijuana industry expectations in Colorado "have continued to be revised downward" since 2022, when the state's cannabis industry experienced an oversupply of product, decreasing prices and plummeting dispensary sales. In turn, this led to a 30 percent cut in the state's marijuana labor force earlier this year.

Although wholesale cannabis prices are inching back up as some stores close, Colorado dispensaries are still hitting seven-year lows in monthly sales. Statewide marijuana revenue fell 22.6 percent on a yearly basis in the 2022-23 fiscal year, the governor's office notes, but economists expect sales to grow around 10 percent annually through 2025.

The funding shortages could lead to sheltering shortages. Family Tree has been providing shelter and housing resources for almost fifty years in the metro area. Last year the organization applied just under $100,000 in Aurora pot tax revenue to sheltering families for a combined 12,000 nights. Under the city's current budget proposal, Family Tree won't get any money in 2024.

Some Aurora City Council members are still keen on finding alternate funding for Family Tree and the Aurora Housing Authority, but they failed to reach a consensus during the November 27 meeting. Councilwoman Alison Coombs, who represents the city's fifth ward, suggested using federal funding from the American Rescue Plan Act (ARPA) to replace the shortfalls created by decreasing marijuana revenue.
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Aurora City Councilwoman Alison Coombs plans to introduce a measure that would divert $200,000 in COVID relief funds for local homeless services.
City of Aurora
Created in 2021 to counter the economic effects of the COVID-19 pandemic, ARPA provided the city with over $65 million to support local business and community organizations. Aurora has just under $1.7 million in ARPA funds left, according to Coombs, as well as over $2 million in general funding reserves.

"We have millions and millions of dollars in reserves in the event of unforeseen issues and expenses, so I would like to move that we take the funds from ARPA, since they have to be spent prior to expiring" in 2026, Coombs proposed.

The councilwoman wanted Family Tree and a rental service program within the Aurora Housing Authority to each receive $100,000 in ARPA funds, but she was barred from introducing the amendment under the meeting's approved agenda. She says she plans to introduce a similar measure in the future, but will likely face opposition from council reps Curtis Gardner and Dustin Zvonek, as well as Mayor Mike Coffman.

Gardner called Coombs's suggestion "disingenuous" while arguing in favor of using ARPA funds to improve police and fire department facilities.

"Part of our job is to make funding decisions with limited resources. We have a capital needs list, project needs list nearly a billion dollars long. We have fire stations decades past their useful life, sometimes [without] working HVAC systems," he said. "It's a shame that funding has gone down. I wish that weren't the case. But to say that all this money can go to these services completely ignores our job."

Coffman said that funding shortages would lead to "some havoc" in organizational and department budgets for 2024, and added that that it was time to put homeless services "on notice that this money is not going to be there the following budget year."

Coombs argued that council hadn't been clear enough with homeless service providers about upcoming budget cuts, and said the ARPA funds were necessary to create "one-time gap funding to ensure people can have shelter, and maintaining goals in getting people back on their feet." She added that she intends to introduce a measure that would allocate around $200,000 in ARPA money for Family Tree and the Housing Authority, but was "open to conversations" of alternative funding.

"I think we need to actually have a vote on that issue, and wish we had done so or considered this in a more robust way in study session," she said.

Denver, considered Colorado's marijuana capital, has about eight times the number of dispensaries that Aurora does, with around 200 different stores. However, Denver marijuana revenue has dropped as well, going from nearly $73 million in 2021 to $54.8 million in 2022, according to the Denver Department of Excise & Licenses. Based on monthly dispensary sales and tax revenue data collected in 2023, this year the city anticipates a similar rate of decline.
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