Proposal to kill Aurora’s $2 employment tax would cut $5.9 million from city budget

1030

AURORA | An end to Aurora’s so-called “occupation privilege tax” on businesses and employees may be in sight under a proposal by council conservatives that would also leave a $5.9 million revenue hole in the city’s budget.

Also called a “head tax,” the levy imposes a monthly $2 tax on businesses for each employee, and $2 monthly from each employee of an Aurora-based business.

The cut would save individuals working in Aurora $24 a year, while most businesses would save $24 per year, per employee. What impact this would have on the City of Aurora is unknown and would depend on what the City Council removed from the budget to compensate.

Budget manager Greg Hays said during a policy committee meeting Tuesday that the $5.9 million in lost revenue is greater than the general fund budgets of at least four different city departments.

“We would have to go find that money from somewhere,” Hays said. “It is a significant amount of money.”

Manager of tax Jeffrey Edwards said that if the council didn’t want to cut funding for police, fire, 911 dispatching, courts, transfers or other mandates, they would have to cut 5% from the $117 million remaining of the city’s $475 million budget, consisting mostly of other personnel and supplies.

Councilmember Danielle Jurinsky, the proposal’s sponsor, said she thought the cut was the right move to lift an “additional, unnecessary, burdensome tax” from businesses and workers.

“The fact that we have a tax on businesses and workers in the City of Aurora stating that it’s their privilege to do business in this city or be a worker in this city, I can’t believe this has never been brought up before, but I think that we absolutely need to change our mindset on that,” she said Tuesday.

Aurora’s “occupational privilege tax” was introduced in 1986 to offset the cost of public benefits such as police and fire protection, and road maintenance enjoyed by those who work in the city, according to Edwards.

The annual revenue collected via the tax goes into the city’s general fund, which is mostly fed by sales and use tax. A portion of the privilege tax is also remitted as part of the tax-increment financing deal in the Aurora Urban Renewal Authority, Edwards said.

He said that, today, Aurora is one of five Colorado cities that impose such a tax, along with Denver, Greenwood Village, Glendale and Sheridan.

“This was essentially a way for us to distribute the tax burden for the city to those that are coming into the city to work,” Edwards said.

But conservatives say they wanted to ax the tax, arguing that it is instead a privilege for Aurora to be facilitating the work of local businesses and employees.

“In terms of sending a signal that we want to continue to be the most business-friendly city in the state … we have to, I think, change our mental model and recognize that it’s actually a privilege for us to have employees here, and it’s not a privilege for them to work here,” Councilmember Dustin Zvonek said while speaking in support of the tax cut.

The scope of the cut and the fact that it was being introduced just weeks before the council is scheduled to finalize the city’s 2023 budget led others to express skepticism.

Councilmember Crystal Murillo called it a “last-minute” addition to the budget and pointed out that Jurinsky was introducing a large cut whose impacts were unclear the day after the council voted to require that policy proposals come with a cost estimate.

The ordinance concerning cost estimates, which passed unanimously on first reading Monday, will require the city manager to prepare an estimate before an item is voted on that includes the projected financial impact of a policy to the city and where the money would come from to pay for it.

A council member bringing forward an item outside of the budgeting process would also be required to find additional revenue or cuts to offset the impacts of the item.

While Jurinsky said Tuesday that there was a surplus in the budget and that she felt she shouldn’t be required to identify spending cuts to offset the tax break, city staffers confirmed that the tax cut would mean an ongoing $5.9 million annual cut to revenues.

“Coming into the conversation and just saying that, oh, we have a surplus, and therefore I don’t really need to look for the accompanying piece of where this ongoing revenue would come from, is concerning to me,” Murillo said. “There will be budget implications. … I would like a better understanding of where city management would take those ongoing funds.”

Zvonek replied that it was fortunate the budget discussion was happening at the same time, so the council could figure out how to make the cut work.

“I think now’s actually the perfect time to move it forward,” he said. “It means we’ll have to do some work, but that’s OK, because that’s what we were elected to do.”

While Murillo opposed the item moving forward from the Management & Finance Policy Committee, council members Curtis Gardner and Dustin Zvonek voiced support, meaning it is on track to be considered by the entirety of council at a future meeting.



0 0 votes
Article Rating
Subscribe
Notify of
guest

13 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Hypocrisy Monitor
Hypocrisy Monitor
2 months ago

Perhaps this will force a hard look at the wasteful spending on “social justice.” Undoubtedly, the city of Aurora suffers from the bloat of ESG and DEI initiatives and likely is frittering away millions in its service.

Doug
Doug
2 months ago

What are you referring to? this is simply more lip service from an incompetent uninformed councilmember.

GeneD
2 months ago

Just like criminalizing homelessness, this idea is being put forward with no consideration for consequences. Where is the missing $5.2 million going to come from? Wherever this knee-jerk proposal goes from here, Danielle, as a business owner and potential beneficiary of the tax removal should recuse herself from any further discussion and voting on it.

This inept Council is a great demonstration example of what will happen if ReTrumplicants continue to move into positions for which they are unqualified, inexperience, and guided by dogma.

Doug
Doug
2 months ago
Reply to  GeneD

Couldn’t have said it better

MediaMark
MediaMark
2 months ago

How about exempting employees who actually live in Aurora, not that $2 per check is a real burden! But business taxes? C’mon now- who is going to pick up the lost revenue?!

Last edited 2 months ago by MediaMark
Michael L Moore
Michael L Moore
2 months ago

Once again, I disagree with Ms. Jurinski! Prudence suggests that any proposal that comes to the council does so with a good faith cost estimate attached. I’m very concerned that she routinely flouts convention and does not opt for transparency. I believe that 99% of candidates run for office to do good work. Transparency is paramount to doing good work while in office. I wish she would follow decorum and lay out the ramifications for any suggestions she brings to the city’s attention. She owes that to voters. Otherwise, we will conclude she is part of the 1% who want to push through their agenda no matter the cost!

Doug
Doug
2 months ago

As usual this makes no sense. $24 a year? But, hey, Danielle is back in the news.
A council member bringing forward an item outside of the budgeting process would also be required to find additional revenue or cuts to offset the impacts of the item.
so Danielle, where’s your addional revenue??

Joe Felice
Joe Felice
2 months ago

Eliminating taxes is all well and good, but the money has to be gotten somewhere.

Emily L Carroll
Emily L Carroll
2 months ago

How do they propose to make up for the lost revenue of $5.9 MILLION….increase sales tax on those of us who have the “privilege” of living here? Before they pass the “ax the tax” ordinance, it seems they should find that “somewhere” income first.

Jeff Brown
Jeff Brown
2 months ago

As someone who is fairly well versed in the city government’s budget and the city’s economy, I strongly oppose this proposal.

Council just recently decided $35 million in additional debt is needed to resolve the road maintenance backlog — a backlog that accumulated over the decade when the economy was absolutely stellar. Now a proposal to cut a tax because CM Jurinsky believes the city can just suck it up? Very, very bad decisions, both.

When is this city council going to acknowledge the pitiful state of the city’s economy and their responsibility to act?

The council hasn’t even requested any benchmark data on the city’s retail economy since 2016. That’s a council with its head in the sand.

dean68
dean68
2 months ago

The whole problem with this thing is the total unfairness to the companies that pay their fair share. The city has so many companies mainly the smaller ones that are unwilling to pay for this “privilege” to work in Aurora. The folks that should be complaining about this the most are the companies that pay.

Doug
Doug
2 months ago
Reply to  dean68

Specifically which ones? $24 a year isn’t even a drop in the bucket

Gus Mulligan
Gus Mulligan
2 months ago

It appears to me to be a rather ridiculous cut to the city’s budget. A tax of 24 for an employee in a year is nothing. The employer matches it so $24 times the number of qualifying employees is the employer expense. It just seems like a nothing tax, as for the cost of “administration” duh, count your employees multiply by 2 and that is your employer cost. Fill out a form, write a check, mail, doesn’t seem onerous to me.