Loveland council sends 1% sales tax hike to ballot

LOVELAND — Voters in Loveland will get to decide in November whether to raise the sales tax the city collects by 1% with no expiration date or earmarks for the revenue the extra tax would generate.

During a special meeting Thursday afternoon, the Loveland City Council sent the measure to the Nov. 5 ballot on a 7-2 vote, after voting 6-3 to reject an amendment by Council Member Dana Foley that would have lowered the requested increase to 0.75%.

The increase is being sought to offset a city budget shortfall  — which the city’s chief financial officer, Brian Waldes, had projected to be around $13 million a year— that resulted after voters last year exempted collection of city sales tax on food purchased for home consumption.

Mayor Jacki Marsh opposed placing the tax increase on the ballot, contending that “1% is an ask greater than what we need” and suggesting that some of the shortfall would be erased once the tax-increment financing agreement for the original Centerra development expires in 2029 and the normal rates of sales and property-tax revenue would start being received the next year.

That 2024 agreement specified that for the next 25 years, the city could collect only 1.75% sales tax from retailers at the Promenade Shops at Centerra instead of its regular 3%, allowing Centerra to charge its own 1.25% public improvement fee.

Foley had sought putting the smaller increase on the ballot instead, predicting that voters wouldn’t approve anything larger and arguing that the three-quarter-cent increase “will put us right about where we said we’d get to when we lost the food-tax revenue.

“A little more breathing room is ideal,” he said, “but I don’t think we’re going to get past the finish line with that.”

The majority of council members supported the request, however, with Mayor Pro Tem Jon Mallo stating that “I haven’t heard anyone say that 1% isn’t the right direction to go.”

Thursday’s special meeting was scheduled during Tuesday night’s regular council meeting when City Attorney Vincent Junglas pointed out an issue with the publication of a legal notice on the question.

The sales-tax ballot issue will join three others the city approved on Tuesday night. Voters will get to decide on Nov. 5 whether to allow marijuana dispensaries outside residential-zoned areas in Loveland, whether to make it easier for the City Council to hire or fire a city manager or city attorney, and whether the city can keep any excess revenue it receives for police, fire, parks and infrastructure needs.

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