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City presents options to raise revenue including food tax; council discusses trade-offs
Summary
Finance staff outlined options to increase revenue — raising general sales tax, taxing groceries for home consumption, and other enforcement/compliance steps. Staff said ballot language would be needed by August; councilors debated economic effects, alternatives and the need to pair revenue changes with spending cuts or development reforms.
City finance staff on Jan. 6 presented a menu of options to increase municipal revenue, including modest increases to the local sales tax base, a tax on groceries purchased for home consumption and stepped-up compliance and audit efforts.
Valerie (Val) Colombo of the finance/sales-tax division described Pueblo's current local sales tax base and compared Pueblo to other Colorado home-rule cities. She said Pueblo's local sales tax rate that goes to the general fund is 3.0 percent, below the home-rule-city average of about 3.74 percent (based on the slide set shown to council). She said total combined tax in Pueblo is 7.6 percent compared with an average of 8.22 percent across the 66 home-rule cities included in the comparison.
Colombo presented estimated revenue outcomes based on 2023 gross sales and grocery deductions. Using 2023 grocery deductions (which the presentation listed as $373,471,350), staff showed scenarios where a dedicated…
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