Denver Issue 2B: Homelessness sales tax

If approved, Denver’s proposed sales tax to help those experiencing homelessness would charge shoppers an extra 2.5 cents on every $10 purchase. The measure would raise a projected $40 million in its first year. That money would have to be spent on services and other amenities for people experiencing homelessness like housing shelters, catalytic projects and other programs.

The case for: The tax would provide sorely needed cash for people in Denver experiencing homelessness, said sponsoring City Councilwoman Robin Kniech. The idea would be to invest in “proven solutions” and scale them up. Making shelters more attractive to those on the streets and providing a viable route out of the facilities and into stable housing would effectively dent the city’s homeless population, which is increasing year over year.

The case against: The tax would hit low-income residents the hardest, said Ben Murrey, director of The Independence Institute’s Fiscal Policy Center. The ongoing economic recession would exacerbate that concern as well, he said. And the more money city officials use to combat homelessness, the worse the problem has become.

Ballot language: Shall City and County of Denver sales and use taxes be increased by $40 million annually, commencing January 1, 2021, and by whatever additional amounts are raised annually thereafter, from a twenty-five one-hundredths of one percent (0.25%) sales and use tax rate (2.5 cents on a ten-dollar purchase), that will not be collected on food for home consumption, water, fuel, medical supplies or feminine hygiene products, to be used to fund housing, shelter or services for people experiencing homelessness, including, but not limited to:

• Building housing, expanding rental assistance or providing supportive services or other supports to house people experiencing homelessness;
• Expanding the number of shelter beds, improving access for underserved populations, and providing better health and housing outcomes through 24-hour shelter and drop-in day services such as coronavirus prevention, mental health care, substance treatment, housing and employment counseling, and other services; and
• Providing more housing referrals and other services to people living on the streets or in cars to help them exit homelessness;

And, in connection therewith, shall no more than eight percent (8%) of the total annual revenues derived from the increase in sales and use tax be spent on city administrative costs related to the above purposes; and shall the monies derived from the increase in sales and use tax not be used to offset any current revenue expenditures from the General Fund; and shall the revenues from these increased taxes be collected and spent in each fiscal year by Denver without regard to any expenditure, revenue-raising, or other limitation contained within Article X, Section 20 of the Colorado Constitution or any other law?

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