Aurora says pot taxes may fluctuate this year

AURORA | Pot revenue from newly legal pot shops may be unpredictable, city staff said Tuesday, and any money coming from an additional sales tax shouldn’t be dedicated toward specific projects.

“All of our revenue estimates are really preliminary. I’m hesitant to count our chickens before they’re hatched,” said Aurora City Finance Director Jason Batchelor at the meeting, where staff and council committee members looked at potential revenue once businesses start opening in October.

The city could receive $5.2 million annually if voters approve a ballot measure in November that would impose a special sales taxes for retail marijuana. Without the special sales tax, the city expects to receive $2.8 million from the state. 

But that revenue may fluctuate as Aurora will be competing with pot shops across Colorado that will also open in October, the earliest new retail shops can open in the state. Batchelor said the city should use the money for one-time projects, in case the city’s revenue is less than expected.

Batchelor said those one-time projects could be decided next year as part of the spring supplemental budget, when the revenue numbers are more reliable.

Councilwoman Sally Mounier said she didn’t want to see the money going to one-time projects indefinitely.

“Down the road, I want to see this revenue go to six agencies funded by photo red light so we can get rid of photo red light,” she said.

Nancy Freed, Deputy City Manager, said the revenue would eventually become part of the city’s annual budget.

“We just don’t know enough about it for the 2015 budget process,” she said.

Tax collections released June 9 showed that Colorado sold about $22 million of recreational pot in April, an increase of about 17 percent from March and an increase of about 58 percent from January, the first month of retail sales. The special sales taxes are being threatened by a lawsuit that argues they violate a constitutional provision that says marijuana should be taxed the same as alcohol.

Staffers said the sales tax ballot question should be written so that it doesn’t require the money to go specifically to public safety measures, unlike Denver and Boulder. Less than one percent of the marijuana revenue will already go towards public safety measures under the city’s 22-page retail marijuana ordinance.

Council members have so far suggested using the money to improve libraries, pools, parks and recreation centers, and even toward building new recreational facilities.

The Associated Press contributed to this story.