Now is not the time to increase taxes on families, young people, our seniors and our neighbors. Increases in sales taxes hurt those who are trying to get ahead or living on fixed incomes, the most.
As a former city councilwoman in Lone Tree, Colorado, I was shocked to learn via an online presentation by the Lone Tree mayor and city council that they are proposing a massive 66% increase of the Lone Tree City sales tax. The mayor is advocating for this with the “it’s just a penny” rhetoric and that Lone Tree has not raised its’ sales tax rate since 1995.
Lone Tree’s total sales tax rate is 6.8125%. This is comprised of 2.9% state sales tax, 1% county sales tax, 1.8125% Lone Tree sales tax (.3125% is dedicated to paying off the debt incurred in building the arts center and improvements at the local South Suburban pool) and 1.1% RTD sales tax. A one penny increase in Lone Tree’s sales tax, net of the .3125% that has a specific purpose, is 66%.
While politicians, bureaucrats and interested parties (PBIs) opine that Lone Tree needs to increase the sales tax rate because it hasn’t been raised since 1995, they omit three key points. First Lone Tree’s population has grown from about 3000 people at incorporation to almost 13,000. That is over a 400% increase in population which equates to a lot more people paying sales tax. Also, the cost of goods and products have increased over the years so people are paying sales taxes on higher prices for goods and products thereby paying more in sales tax. And now Lone Tree collects sales tax on your online purchases. Again, increasing sales tax collections to the city.
Lone Tree is a favorable place to shop and dine because our sales tax rate is lower than most municipalities in the metro area. That is a good thing. People are rational economic actors and many will make choices to shop and dine in localities with lower taxes. My neighbor mentioned a friend who drove from north Denver to buy her television at the Lone Tree Costco so that she would pay less sales tax. If Lone Tree raises sales tax rates, that incentive for people goes away. The economic principle of “if you want less of something, tax it,” applies here.
People are hurting. Many kids have lost a year of learning. Businesses were shut down during the COVID-19 policy reactions. Many businesses have closed. Now is not the time to institute a huge 66% city sales tax increase on school supplies, household items, clothing and the products that are delivered to your front door via online shopping.
Lone Tree facilitated the construction of the $6.8 million pedestrian bridge that spans Lincoln. Many hard-working individuals question such a lavish expenditure. Lone Tree must tighten its’ belt like the rest of us, re-assess the sales tax share-back arrangements with certain businesses and entities, and re-assess spending on capital projects.