Sterling sales and use tax for roads

Sterling's City Council finalized Ballot Issue 2A on August 25, 2026. It adds a 1% city sales and use tax for five years, beginning January 1, 2027. As an example, at 1%, $100 of taxable purchases in Sterling adds $1. The question puts the increase at $3,600,000 in the first year and at whatever the tax collects in each later year. Under the state's January 2026 rate table, the combined general sales tax rate in Sterling is 7%: the state's 2.9%, Logan County's 1%, the city's 3% and the South Platte Valley Regional Transportation Authority's 0.10%.

The revenue goes into a dedicated fund separate from the city's general fund. The city may use it only to repave, repair, maintain and improve city streets and roads, including drainage, curbs and gutters, and pedestrian safety improvements. The city says it would move its existing road maintenance revenue and spending into the new fund, and would take over repair and maintenance of curbs and gutters in the rights of way from the adjacent property owners, paying for it from the new fund.

The city's plan puts a drainage study and a review of the water and sewer lines under the roads it prioritizes ahead of paving, and it gives priority to higher-use roads whose underground lines are in good condition. The city says projects will generally address utility needs first, using separate funding sources; water and sewer have dedicated funds.

The question lets the city collect, retain and spend all revenue from the tax, together with any earnings on it, without limitation or condition, as a voter-approved revenue change under Article X, Section 20 of the Colorado Constitution, the Taxpayer's Bill of Rights (TABOR), or any other law.

The city estimates its road repairs at more than $40.3 million, not counting curb, gutter or drainage work. It once set aside about $1 million a year for paving; the city says it moved that money to other services and programs as the community's needs grew. The 2026 general fund budget includes nothing for contracted road repaving. The city budgeted $435,000 for street improvements in its capital improvement fund, and when no contractor showed interest in a project that size, it put the money toward curb ramps and the start of a master drainage plan.

A similar "Penny Tax for Roads" question with no sunset clause failed in 2025, when about 53% of voters opposed it. The council cut this year's draft from a 10-year sunset to five after council member Dean Haynes said he believed the question would not pass without a five-year sunset. City Manager John Sheldon said the needed projects will take more than 10 years. Haynes said he believed that once people saw the first five years of work, an extension would not be hard to win. City Clerk Harmony Malakowski said an odd-numbered term would let the city renew the tax without another special election.