AURORA | Aurora’s City Council demurred Monday on a proposal to eliminate the city’s 5% excise tax on marijuana-growing operations, questioning its necessity and how the city would make up for lost revenue.
Councilmember Curtis Gardner, who sponsored the proposed tax cut along with Councilmember Danielle Jurinsky, has expressed interest in sponsoring a tax cut benefiting wholesale marijuana businesses since September. That’s when city staffers told the council about the disappearance of local marijuana cultivation operations in the city and how pot sales had fallen since the pandemic, which a lobbyist blamed in part on high taxes.
Eliminating the excise tax that voters approved in 2014 would save the city’s 13 remaining growers about $686,600 every year, money that would otherwise go into a special marijuana fund that has benefited projects including recreation centers and transportation work.
“I think eliminating our excise tax rate has the potential to incentivize these businesses to relocate into Aurora,” Gardner said, adding that lowering taxes could also lower the price of marijuana for consumers.
“If we are able to reduce this excise tax or eliminate this excise tax, it’ll make that product less expensive and ultimately make our sales in the city here more competitive.”
The excise tax applies to wholesale marijuana offered by growers in addition to the 15% excise tax imposed by the State of Colorado. It is distinct from the city’s 8.75% special sales tax on marijuana purchased by consumers.
At the study session that preceded Monday’s regular meeting, Gardner suggested the city make up some of the difference by scaling back the work done by city regulators. He mentioned the requirement that dispensaries back up video surveillance footage at an off-site facility as one example of a regulation that creates unnecessary work for the city.
“There was really a big rush to overregulate this industry,” Gardner said.
Jurinsky said she believed the city should also operate its recreation centers “more like a business” so that the Parks, Recreation and Open Spaces Department could become self-sustaining.
However, other council members said they believed Gardner and Jurinsky hadn’t adequately figured out how to fill the gap left by the tax cut and pointed out that marijuana is still being grown in the city.
“We still have 13 licensed cultivation facilities, so I don’t think it’s deterred anybody from coming to our city,” Councilmember Francoise Bergan said. “I have a concern that we would lose revenue by removing this excise tax.”
Councilmember Alison Coombs, too, described Gardner and Jurinsky’s plans to compensate for the cut as “hypothetical” and joined the bipartisan majority of council members who objected to the tax cut moving forward from Monday’s study session, meaning it will not be automatically added to an upcoming regular meeting agenda for a vote by the council.
The item’s sponsors may still choose to bring it forward regardless.
“I’m more than happy to make all of my colleagues vote on the record on a tax cut, so I gladly will bring it to the floor,” Gardner told the rest of the council.
Jeez, you would think a complete plan to deal with the loss of revenue would accompany a proposed tax cut, but not in our dysfunctional city council. I wish they would do their work in a businesslike manner!