Littleton's $6.5M Revenue Shortfall: Council Narrows Options

LITTLETON, CO — Littleton residents are invited to a first reading Tuesday on the city's latest potential solutions for its $6.5 million revenue shortfall.

After conducting a second opinion poll, City Council has narrowed the revenue-generating options it was considering.

Council members directed staff to draft ballot language — for the upcoming Nov. 2 election — that would ask voters about both a half-percentage and three-quarter-percentage increase to the sales tax rate, which is currently 3 percent:

• Increasing the sales tax rate by 0.5 percent — a half-percent increase would generate an average of $6.5 million per year and cost an additional $0.50 on a $100 purchase.
• Increasing the sales tax rate by 0.75 percent — a three-quarter percent increase would generate an average of $10 million per year and cost an additional $0.75 on a $100 purchase.

City Council also considered two other possible revenue generators — increasing the retail marijuana tax rate and instituting a new lodging tax.

"While there appears to be support for a lodging tax among citizens and members of city council, the majority agreed that more communication with the city’s affected stakeholders is critical before moving forward," the latest Littleton Report read. "As for a marijuana tax rate increase, it’s too new to determine what impact it would have and would not be enough to close the annual $6.5 million gap. "

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The projected annual $6.5 million revenue shortfall is in the city's Capital Projects Fund, which pays for roadway maintenance, building enhancements and other infrastructure projects. The fund is set to reach zero in 4 years, and the city has a $98 million list of more than 70 unfunded capital infrastructure projects over the next 15 years.

"This deficit is due to rising infrastructure maintenance and repair costs, steadily increasing capital expenditure needs, an historically low tax rate, and a lack of revenue diversity," city officials said in the Littleton funding fix webpage.

The public is invited to a first reading at 6:30 p.m. Tuesday at the Littleton Center Council Chamber, 2255 West Berry Ave. The second reading and public hearing is scheduled for Aug. 26.

>> More information about attending the City Council meeting on Tuesday can be found here; learn more about the Littleton revenue shortfall here.