COLORADO SPRINGS, Colo. - The annual State of the City address produced a surprise on Thursday -- a suggestion from Mayor Steve Bach that a sales tax increase could be ahead for residents.
Bach mentioned the possible tax increase to an audience of more than 600 at the Broadmoor's International Center.
The mayor said with a backlog of $1.3 billion in capital improvement projects and a variety of other needs, the city must have more revenue if it is to reduce the backlog in a reasonable time period.
Bach offered two options to generate the revenue.
"One would be to issue new bonds, subject to voter approval and without raising taxes," he said. "Or asking voters to approve a sales tax increase -- which I suggest should have a sunset provision, with a lot of other conditions."
The mayor didn't explain how much a tax increase would be, but that he would have a better idea after hearing from residents and the City Council on the matter.
"I've been hoping for three years that our economy would get kick-started here, and we'd have a lot more sales tax revenue to apply to those needs," Bach said. "But it just hasn't happened. So in the near term, over the next five to 10 years, we're going to have to find additional revenue sources."
The mayor said he hasn't eliminated the likelihood that a sales tax question could be placed on the November or April 2015 ballots. Without additional revenue, he said, the city could face a budget deficit of $10 million by 2019.
Bach said the city has for too long delayed priorities such as drainage projects, replacing an aging fleet of public safety vehicles, paving crumbling streets, upgrading Internet technology in city government, and replacing grass with artificial turf at city parks to save the expense of watering.
The mayor said the effort to generate more revenue could be helped by creating jobs from revitalizing the airport; expansion of University of Colorado Health; and building his proposed City For Champions project, which would provide new entertainment and tourism facilities.
"Unfortunately, we won't have the revenue we need anytime soon," Bach said. "But we need to start planning how to get it. It will achieve our goals of having a vibrant community, a sustainable government and a well-maintained city."