AURORA | Lawmakers hesitated Monday when presented with a proposal to cut Aurora’s occupational privilege tax, questioning again how the city would make up for the resulting $5.9 million hole in revenue.
After the City Council decided Oct. 8 to put off repealing the tax for at least a year, the group indicated Monday that it was not comfortable committing to a full repeal by Jan. 1, 2024.
Aurora’s occupational privilege tax is split between employees who work in Aurora and their employers, with employees paying $2 per month and employers paying $2 per month, per employee. The tax, introduced in 1986, is meant to offset the cost of city services provided to those who work in Aurora but may not pay other forms of tax.
The city is projected to collect about $5.9 million annually from the tax — an amount that city staffers have said is greater than the individual budgets of four different city departments.
Bill sponsor Councilmember Danielle Jurinsky could not explain last weekend how the city would compensate for the budget cut that would result from repealing the tax. On Oct. 8, a majority of council members at first tentatively endorsed the cut, but they then backed off the notion when at the end of their budget workshop they found themselves approximately $5.1 million from closing the gap, with no clear plan for making up the difference.
Jurinsky suggested Monday that the city could entice new businesses by advertising the repeal of the tax, offsetting the cut with sales tax revenue.
“The path forward here is attracting businesses,” Jurinsky said Monday. “This is what Aurora is doing. Aurora is leading the way.”
Jurinsky said the amount of the cut could be made up if the city attracted “a couple” of “fancy steakhouses.” Taxed at the city’s current rate of 3.75%, it would take about $157.4 million in new sales to make up for the cut. The city has a deficit of at least $8.3 million that it will need to balance in its 2024 budget, according to budget manager Greg Hays.
Jurinsky clashed with city staffers who warned the council that implementing the cut would make the city’s revenue base less diverse and could jeopardize the city’s credit rating if the council tried to make up the difference using one-time funds.
“We would need ongoing cuts, it may affect our credit ratings, we would be a fiscal outlier compared to other area cities, and … the fiscal benefits to individual taxpayers is relatively small,” Hays said.
Jurinsky and other council conservatives said it wasn’t fair that she wasn’t informed about the details of the staff presentation ahead of time. She told Hays and manager of tax Jeffrey Edwards that they were “defending a bad tax” before Hays delivered a presentation on the fiscal impacts of the cut.
“I’m going to argue (with) you. I’m not going to listen to you. … Shame on both of you. Shame on city staff,” she said, and accused City Manager Jim Twombly of “setting (her) up” with the presentation.
Twombly said it was the job of staffers to “provide council with information so they make fully-informed decisions,” and Hays said the presentation was meant to address questions raised during the Oct. 8 workshop.
While Mayor Mike Coffman and council members Francoise Bergan and Dustin Zvonek questioned why the item’s sponsor wasn’t told ahead of time about the details of the presentation, which Zvonek called “one-sided,” other council members admonished Jurinsky for her treatment of city staffers.
“If you’re feeling personally attacked by them pointing out inconvenient truths, maybe analyze your policy,” Councilmember Juan Marcano said. “Aurora is an exceptionally lean and well-run city. What you’re doing with this proposal is jeopardizing our credit rating, our ability to provide services to our residents and God knows what else.”
When Coffman asked Jurinsky whether she would be open to repealing the occupational privilege tax in phases, with staff determining financial triggers for each phase of the repeal, Jurinsky said she was not.
She also reiterated a complaint from the budget workshop — that the city is heavy-handed with business owners in its collection of the tax.
“Businesses are treated horribly,” she said.
The mayor said that, regardless of the bill’s failure, he wanted to consult with staff about a phased approach to getting rid of the tax.
Ultimately, only Bergan, Jurinsky, Zvonek and Councilmember Steve Sundberg said they supported the proposed repeal moving forward from the study session, meaning Jurinsky did not have the support of a majority of council members to bring the item to a full meeting, though she could still choose to do so.