Boulder Chamber Statement: Funding Priorities

Letter from the Boulder Chamber

Mayor Jones and Members of Boulder City Council:

As you discuss funding for various identified needs tonight, with a focus on open space and transportation, the Boulder Chamber urges you to begin by considering the true priorities for community investment. We also urge that your financing decisions reflect a fair balance of benefits and impacts. Finally, we will draw attention to the other side of the equation: economic vitality. Before we continue to layer yet another tax on our already burdened residents and businesses, the Boulder Chamber asks you to join with us in greater attention to the engine that fuels the quality of life we currently enjoy.

I offer as background the interesting fact that Boulder’s sales tax is one of the HIGHEST in the nation, yet we have one of the LOWEST percentages directed to our General Fund. According to Dr. Rich Wobbekind and other widely respected regional economists, it is likely that Colorado will enter an economic downturn in the near term. We need to structure our budget so it is nimble enough to address timely needs, especially during economic uncertainty. Further, we all know enough about economics to recognize that a recession likely will entail a reduction in city revenue. During such periods, it is essential that we maintain the flexibility in our funding resources to provide critical city services, fund priority projects, maintain quality of life and support economic vitality.

This is not a new appeal. It is the same message that Boulder policy leaders heard from the Blue Ribbon Panel in the midst of our last economic recession. In the face of this wise counsel, we hear murmurs of yet another dedicated Open Space sales tax. Ironically, it was just a couple of years ago that we heard Open Space had sufficient funding to address its long-term needs, at least relative to other investment priorities, like transportation. The Boulder Chamber loves Open Space and has gladly supported taxes to fund this system. Yet, when considering other priorities, we have to ask if this is the right time for further dedication of our already stretched sales tax dollars.

Speaking of other investment needs, tonight you will be considering potential solutions for funding the operations and maintenance of our transportation system, services and programs. When we first consider the basic needs in this area, it is worth noting that necessary maintenance for our transportation system is being deferred, which means more potholes and increased safety risk in the coming months. On behalf of the business community, I want to call attention to our workforce that bears the burden of insufficient transit solutions and traffic backups to the L-towns and beyond in their daily commutes. In addition to congestion reduction, we recognize that an improved transportation system can also help us meet our community climate goals.

Perhaps most compelling is the social equity issue at play in the discussion of our transportation needs. Due to the cost of living and limited housing options in Boulder, the members of our community living at the margins tend to be those who are most reliant on longer commutes to get to their jobs. We talk a lot about our inclusivity values, but this is the hard truth of our funding prioritization when compared to talk of another Open Space tax.

Of course, the temptation here is to tax the “other guy” when it comes to funding to meet our critical needs. Too often, that other guy is the business community. It is important to consider that 76 percent of our business community is comprised of small businesses—those with fewer than 10 employees. This is everything from startups and important community service providers to the mom and pop retail shops we love to frequent. Our already high property and sales taxes put enormous pressures on small businesses, and they are often hardest hit during market fluctuations.

At the other end of the spectrum are the larger businesses that have attracted so much unwarranted derision in recent years. These organizations add critical stability to our local economy. They also contribute mightily to our tax base. Without their contributions, in the form of business use tax, dramatically higher property tax payments and other sales tax generating activity, Boulder residents would be shouldering a much higher share of the local budget burden. Concerningly, we already hear of businesses that make the decision to expand or relocate outside of Boulder based on our community’s high tax burden. We can expect that sentiment to be even more resonant during an economic downturn.

Where am I going with this? We face great difficulty in meeting even the most fundamental maintenance needs for our transportation system. Yet it’s a critical asset to addressing important environmental, economic, social equity and quality of life goals. That is a balance of interests that demands a balanced solution without solely pinning the cost burden on the “other guy.” Let’s work together to advance sustainable funding mechanisms for transportation infrastructure and services that the business community can champion along with our local residents.

Finally, it seems there is always talk of new taxes in this town to cover everything from basic needs, like public safety, human services and transportation, to tackling challenges that Boulder is unique in addressing at the local level. Think climate concerns, arts and culture facilities and childhood obesity. The Boulder Chamber has been proud to stand in support of most, not all, such public investments through additional taxation. However, that cannot be the only approach we take. Repeatedly going back to the tax well burdens our residents with a higher cost of living and undermines business success.

There is another approach that gets scant attention these days: economy vitality. The Boulder Chamber invests all its member resources in sustaining Boulder’s economy, through programs that help local businesses thrive and build valuable B2B relationships. We’re also working in collaboration with city, county, state and federal authorities to address some of the most pressing barriers to business success, namely access to workforce talent that is threatened by high housing costs, traffic congestion and the need for better alignment between the talents of our workforce and available job opportunities. But we can’t go it alone.

We need our policy leaders to give at least as much attention to supporting the businesses that are the foundation of our tax base as you give to new tax proposals. Loose talk of policies that send jobs and businesses out of our community are both callous and reckless. Our economy is relatively strong at the moment, but as we’ve heard from CU Economist Rich Wobbekind, Boulder is increasingly surrounded by competition for retail sales expenditures. That does not bode well for the condition of our tax base in the face of an economic recession. We need to be focused now, through attention to the conclusions from the Citywide Retail Study and a long overdue update to our Economic Sustainability Strategy, about how we can support the very strength and diversity of the small and large businesses that carries an enormous load of funding for our critical services and amenities.

In conclusion, we share your vision for a community that invests in its Open Space resources and other amenities that make Boulder such a wonderful place to live and work. At the same time, we face critical funding needs for basic services that residents and business expect of their local government. The transportation infrastructure deficits your staff will present tonight are no longer the luxury of a well-endowed community. They are critical needs. Let’s work together to find a way to address this through budget prioritization, a just balance of optional funding sources and due consideration to the economic engine that carries the burden of a significant portion of our current budget. It’s a partnership: our residents and our businesses. Let’s work together to sustain our quality of life and economic vitality, though good times and any potential future head winds.


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John L. Tayer

President and CEO

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