Aurora’s economy is whirring better than anticipated so far this year thanks to thousands of new businesses and higher-than-projected sales, property and use tax revenues despite continued uncertainty spurred by the COVID-19 pandemic.
Sales tax figures were higher than expected by double-digit percentage points nearly every month this year, including a 41% over-performance in July that netted $5.5 million additional dollars for the general fund, according to data presented to the city’s management and finance policy committee last month.
“Colorado and the Denver metropolitan area have done better during the pandemic than other areas of the country,” Andrea Amonick, manager of the city’s development services division, said in a recent interview with The Sentinel.
When looking at the slew of other tax buckets that contribute to city revenues, such as franchise fees, auto use tax and money generated from audits, Aurora is expected to generate about $47.7 million more than projected in 2021.
“Fueled by strong consumer spending, the economy experienced robust growth in the first half of 2021,” according to an internal city budget memo released last month. “…City of Aurora revenues have recovered from the recession more quickly than anticipated.”
And the vast majority — about 84% — of the surpluses have come from sales and use taxes, according to city budget analysts.
Local economic hawks have identified the delivery-first model of shopping that was propelled to the fore during the pandemic as the driver of the strong tax landscape. A city ordinance that finally allowed Aurora bean counters to collect revenue from third-party sellers on sites like Amazon — known as the marketplace facilitator tax — also helped buoy local coffers.
“It’s been a good way to generate revenue for the city,” Curtis Gardner, who serves as chairman of the city’s finance committee, said of the measure that went into effect in September 2020.
Some of those additional revenues have already been dog-eared for ongoing police reform efforts in the city, Gardner pointed out, including the $5 million the city agreed to pony up for the recently announced $15 million settlement awarded to the family of Elijah McClain. The other $10 million is coming from a city insurance policy.
“As part of the fall budget workshop, we set aside money to be used for possible police settlements, and that money came from, essentially, excess revenue for 2021,” Gardner said. “So because of our strong financial position, it’s allowing us to both pay what might be owed there and look at other services the city might be able to offer.”
Another nearly $500,000 has been flagged to set up a new police monitor’s office next year, and hundreds of thousands of additional monies have been siphoned off to pay the various consultants the city has hired to look at the local police department in the past year.
But the health of the city’s tax base has been compounded by the permanently altered workplace environment across the metro area, which has meant more lunchtime dollars staying within municipal boundaries instead of floating to office corridors in Downtown Denver or the Denver Tech Center.
Though trends are still nascent, the so-called great resignation has translated to more Aurora residents starting their own home businesses, which has equated to a robust number of new firms in the city so far this year.
“We’ve had a record amount of new businesses opening,” said Kevin Hougen, president and CEO of the Aurora Chamber of Commerce. “We see some teachers and nurses leaving those industries and starting their own businesses — we’ve had a real increase in business startups.”
Aurora has doled out just south of 2,100 new business licenses this year through Nov. 19, rivaling the nearly 2,500 licenses dispensed prior to the pandemic in 2019, according to Trevor Vaughn, head of the city’s tax and licensing division. And that’s factoring in the spike in licenses that followed the 2018 Supreme Court decision known as South Dakota v. Wayfair which allowed states to tax goods purchased online from out of state.
There were 1,764 licenses given out during the pandemic-ravaged 2020.
Still, Hougen said he’s worried about the thousands of brick-and-mortar businesses that line Aurora’s thoroughfares.
“Overall, for our brick-and-mortar, I’m very concerned,” he said. “…I call it the ‘3M’ dilemma: We went from main street to malls to mail.”
Worker shortages further exacerbate the problem for physical retail spaces, Hougen pointed out. The unemployment rate for the Denver-Aurora-Lakewood corridor was at its lowest rate in months in September, clocking in at 4.8%, according to the federal Bureau of Labor Statistics.
“We’re seeing some growth out here,” Hougen said of the Aurora economy as he was on his way to cut the ribbon on a new Boot Barn store off of Tower Road. “But I don’t want to see it all in deliveries to your doorstep.”