Boulder considers adding question to November ballot to rework its climate tax

Pearl Street Mall, Boulder, Boulder County
Posted at 4:48 PM, May 23, 2022
and last updated 2022-05-23 20:16:01-04

BOULDER — The City of Boulder is exploring the idea of adding a question to the November ballot about reworking its climate tax.

A portion of the city's climate tax is set to expire next year. The proposed initiative would simplify and expand the tax to continue Boulder’s investment in climate resiliency projects.

“I think that the impacts of climate are acutely on everyone's mind right now. What we've seen over the past couple of years is really stark, it is a ubiquitous cover story,” said Jonathan Koehn, acting director of Boulder's climate initiatives department. “It's not just fire. It's floods, it’s impacts to our ecosystems and what was once thought of a slow-moving in the future issue, meaning climate change, is here.”

For Koehn, it’s about matching the speed and scale of climate change with a strategy to reduce emissions while also preparing communities for the impacts they are already experiencing.

Under the proposal, residents would see a drop in their climate tax annual rate, while commercial and industrial businesses would see an increase. It would be lumped together with electric utilities to create a uniform tax.

Boulder has had a climate tax in place since 2006 — something voters have reapproved several times since.

This time around, the proposed changes are:

  • Residential: $38.20 annual rate. Currently residential units pay $42.95 annually.
  • Commercial: $374.90 annual rate. Currently, commercial businesses pay $241.29 annually.
  • Industrial: $1,389.89 annual rate. Currently, industrial businesses pay $704.83 annually.

Koehn says the change in rates would make the distribution of the tax more proportional among businesses and residents.

“Right now, a residence, essentially, is responsible for about a third of the emissions in Boulder, but pays about two thirds of the tax towards our climate work," he said. "Businesses, on the other hand, are responsible for about two thirds of the emission, but pay one third."

However, some businesses are worried about the added tax burden as they try to recover from the pandemic and deal with supply chain issues and inflation.

“In the scheme of things, you know, a few hundred or $500 probably isn't going to put us under, but I must tell you, it's piling on,” said George Karakehian, a former Boulder city council member and the owner of Art Source International on Pearle Street.

The past couple of years have taken a toll on Karakehian’s business. He’s also worried about another potential economic slowdown and the impact that could have.

Karakehian says he wants to be part of the solution, but this is a bad time to be burdening businesses with a bigger tax bill.

“I think everybody's concerned about the environment. That's part of the reason you live here and that's one of the things you do if you do live here, but come on,” he said.

Koehn says he understands that the cost of business is going up and is sensitive to that issue. However, he points out that some of the money from this tax would go to projects like homeowner/business direct cash assistance programs to help pay for energy efficiency upgrades, which could save them money moving forward.

The new climate tax would be added onto customers’ Xcel Energy bills and is expected to raise approximately $5 million each year. The current rates raise about $1 million less per year. The money would be leveraged with other funds, including federal money to help the with the resilience plan.

The money would also help fund microgrid and energy storage projects, renewable energy development, building electrification, expanding electric vehicle charging stations, regulating business codes and more.

Part of the survey asks voters to weigh in on how the money will be used.

The City has sent a survey out to residents 18 and older asking them to weigh in on the idea before officially placing the proposal on the ballot. Residents will have until June 2 to complete the online survey.