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Denver’s special sales tax, broken down by revenue and use


Denver’s special sales tax, broken down by revenue and use

In 2006, Denver voters approved the city’s first special sales tax, supporting the creation of the Denver Preschool Program by the narrowest of margins, just 1,815 votes, or a fraction of a percent.

But nearly 20 years later, special taxes that set aside a portion of the city’s total tax for a specific purpose are proving popular with Denver voters. Voters later expanded the preschool tax, raising it from 0.12% to 0.15%, and in 2023 they voted a third time – this time with 78% approval – to permanently enshrine it in municipal code.

Denver voters have passed six other special sales tax measures since 2018, addressing a range of programs and initiatives, some of which originated outside of City Hall. Together, the city’s seven special taxes account for 1.31% of the city’s effective sales tax rate of 8.81%, which also includes state and county taxes.

This 1.31% amounts to about 13 cents on a $10 purchase.

Here is a breakdown of the purposes of each tax and the amounts the city collected through the end of 2023.

Denver Preschool Program

Approved for the first time: 2006

Rate: 0.15%

Collections until 2023: 306.3 million US dollars

Expected sales 2024: 31.4 million US dollars

What does it do? The tax raises money to provide tuition credits to Denver families to send their four-year-olds to preschool. Since Colorado implemented universal preschool last year, Denver’s program has used its funds to increase tuition and increase instruction time, and expanded support to families of some three-year-olds who have higher needs.

Parks Legacy Fund

Approved: 2018

Rate: 0.25%

Collections until 2023: 213.5 million US dollars

Expected sales 2024: 51.9 million US dollars

What it does: The tax provided an additional source of funding for long-term planning and expansion of the city’s parks, trails and open space networks. Denver Parks and Recreation officials say their focus is on creating a more equitable distribution of parks throughout the city.

Prosperity Denver (formerly College Affordability Fund)

Approved: 2018

Rate: 0.08%

Collections until 2023: 66.9 million US dollars

Expected sales 2024: 16.1 million US dollars

What it does: The tax provides funding for programs aimed at increasing college and other post-secondary enrollment for Denver students. Partner organizations can receive up to 75% of the scholarships they award.

Healthy food for Denver’s children

Approved: 2018

Rate: 0.08%

Collections until 2023: 69.3 million US dollars

Expected sales 2024: 17.2 million US dollars

What it does: The tax funds a grant program for nonprofits, school districts (including Denver Public Schools) and local government agencies that provide healthy food and nutrition-based education to the city’s children. Awards are made by a 13-member committee that includes two City Council members, nonprofit leaders and community volunteers.

Caring for Denver

Approved: 2018

Rate: 0.25%

Collections until 2023: 209.2 million US dollars

Expected sales 2024: 50.5 million US dollars

What it does: This tax provides funds to support a wide range of public and nonprofit programs and services that focus on the mental health needs of Denver residents. The city’s 2024 budget lists eligible services including suicide prevention, substance abuse treatment, prevention programs that provide alternatives to prison, and housing and case management to reduce homelessness. The Caring For Denver Foundation awards grants.

Climate Protection Fund

Approved: 2020

Rate: 0.25%

Collections until 2023: 138.6 million US dollars

Expected sales 2024: 51.8 million US dollars

What it does: The tax provides money for programs designed to mitigate the causes of climate change, according to Denver’s Office of Climate Action, Sustainability and Resilience, a newly created department of city government that will be funded by the tax. Allowable uses include training workers for green jobs, expanding access to solar and renewable energy technology, and supporting climate-friendly transportation options. One popular program offers residents discounts on e-bikes.

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