Cripple Creek voters to consider sales tax hike after COVID March revenue | Mail from Pikes Peak
Cripple Creek officials hope a proposed citywide sales tax increase will help boost city coffers after revenues plummet during the COVID-19 pandemic.
“We’re in deficit on appliance fees and the general fund has been hit by COVID,” City Administrator Frank Salvato said this week. “We haven’t recovered from 2019, so part of that is just supporting the general fund again because we’ve taken such a hit.”
On Nov. 8, voters in Cripple Creek will decide whether to approve the city’s sales tax increase of 1 cent — or 1%, from the current 2% sales tax rate to 3% – from January 1st. The increase would not apply to food purchased for consumption at home.
City officials estimate that Cripple Creek’s sales tax revenue could increase by about $300,000 to $900,000 in the first full fiscal year if voters approve the proposal.
The money would go into the city’s general fund, which pays for police and fire departments, park maintenance and road repairs.
The city council hasn’t decided exactly how the city might use the extra revenue if voters approve the sales tax increase next month, Salvato said. The council was due to attend budget workshops where they would discuss it on Tuesday and Wednesday afternoons, he said.
Click here to read The Gazette’s 2022 Colorado General Election Voter’s Guide
A boost to the city’s coffers is much needed, officials say, as Cripple Creek’s revenue has plummeted since casinos closed for several months at the start of the pandemic. The city relies heavily on income from tourism and its casinos and money from gaming device fees has not rebounded to pre-pandemic levels, despite the increase in device fees imposed by the city council in April.
Salvato said he was not aware of any opposition to the issue.
A proposed 2023 budget available on the city’s website and dated Sept. 22 shows that device fees represent 44% of Cripple Creek’s general fund revenue, the largest of all fund revenue streams. Gaming taxes make up the second largest portion of the fund, at 23%. Sales taxes represent 10% of general fund revenues.
Chief Financial Officer Paul Harris reported in a July 13 city memo that in the third quarter of 2022, Cripple Creek had 2,779 gaming devices, a decrease of 47 devices, or 1.7%, from the second quarter 2022. The number of gaming devices in the third quarter of 2022 compared to the third quarter of 2021 is down 122 machines, or 4.2%, the memo said. Most of that decrease is due to a renovation of Bronco Billy’s casinos, Harris noted.
But “if you compare the third quarter of 2022 with the first quarter of 2020 before COVID-19 hit, the number of devices is down 806 machines, or 22%,” he writes. “At the (worst) point of the pandemic, it was down almost 25%. Although the count has recovered a bit, a 22% drop from the pre-COVID number has a very negative effect on the city’s main source of income.
Additionally, Harris reported in a Sept. 28 city memo that Division of Gaming data for August shows the industry statewide down 4.8%, or 4.9 million. dollars, compared to July.
Comparatively, Cripple Creek had a good August, he said. The total dollar amount of coins played on slot machines as well as cash, coins, chips and other amounts played on live gaming tables at Cripple Creek increased by $4 million, or 2%, compared to July, according to the memo. These amounts for August 2022 compared to August 2021 were down $193,000, or 0.1%. Year-to-date, those numbers are down $37 million, or 2.4%.
The city’s gaming revenue was up $517,000, or 3.3%, from July, Harris wrote. Comparing August 2022 to August 2021, revenue is up $1.1 million, or 7.3%. Year-to-date, revenue is up $1.1 million, or 1%.
The board expects to approve a finalized budget for 2023 on Dec. 7, Salvato said.
Cripple Creek voters will also decide next month whether to legalize the sale of recreational and medical marijuana within city limits. Proponents say the move would boost city revenue to help fix local roads, sewers and water supply infrastructure, and could help meet the needs of parks and recreation, among other things.
Opponents said legalizing marijuana sales in the small gold mining and casino community would increase crime and argued the town was too small to meet emergency, law enforcement needs and public health that they said would follow if voters approved the measure.
The city council decided in August to return the citizens’ initiative on marijuana to voters in the November 8 election.
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