Business groups, unions, Xcel tell Denver council to pump brakes on carbon tax proposal

Proposal will be introduced at Tuesday's meeting
denver city county building city council.png
Posted at 4:05 PM, Aug 12, 2019
and last updated 2019-08-12 20:33:18-04

DENVER – Many of the largest metro-area business groups, unions and the state’s largest electricity provider sent a letter Monday to the Denver City Council asking council members to pump the brakes on and include them in discussions about proposals to introduce a business carbon tax and create a new office dedicated to climate change that will be introduced at Tuesday’s council committee meeting.

Last week, some members of the council said they would be introducing legislation at Tuesday’s meeting to establish the Office of Climate Action, Sustainability and Resiliency and a bill that, if approved by the council, would send a carbon tax proposal to Denver voters to decide on in the Nov. 5 election. This comes after a citizen-initiated attempt to get a carbon tax on the ballot this year failed to gather enough signatures by their deadline.

The carbon tax would apply to commercial and industrial buildings in Denver. Electricity would be taxed at 0.6 cents per kilowatt of electricity and 7 cents per therm of natural gas.

The proposals are sponsored by Council President Jolon Clark of District 7; Council President Pro-Tem Stacie Gilmore, Councilman Paul Kashmann, and new council members Amanda Sandoval, Amanda Sawyer, Candi CdeBaca and Chris Hinds.

The bills will be introduced in the Denver Finance and Governance Committee on Tuesday. If the measure passes committee, it will then go to the full council for a vote, and if approved, the measure would go on the Nov. 5 ballot.

“This is Denver’s commitment to ensuring we live up to our Paris Agreement promise, meet the science-based targets for greenhouse gas emission reductions, and protect the planet for future generations,” Clark said in a statement last week. The others who were quoted in the news release expressed similar sentiments about having to move on climate change issues now.

They said the carbon tax would generate about $43 million each year that the city would use to create grants and incentive programs for Denver businesses and residents to improve their energy efficiency. The proponents also said that the proposal would include a rebate for small businesses that have trouble paying the new tax.

But the consortium of 27 associations, groups, businesses and unions on Monday told the council it should slow the process, balking at its lack of inclusion prior to the introduction of the measure in a council committee. The group includes the Denver Metro Chamber of Commerce, Downtown Denver Partnership, Denver Pipefitters Local 208 and Xcel Energy, among others.

“As you are aware, an initiative such as the one proposed has never been implemented in any major city in our country,” the letter said. “Due to this fact, there are significant unknown impacts, as well as questions and concerns that would benefit from a thorough analysis and discussion from City Council and the community, small businesses, and employers that are impacted by this measure.”

The group said it felt that there were issues about having the measure be referred by the council to voters, who they said would “expect a referred measure to have gone through an in-depth analysis.” But the group said, “The current lack of process has not allowed for this.”

It also said it worried that if the measure was approved by voters and needed to be changed, the council would not be able to do so for a year.

“Instead of facing this scenario, City Council should take the time and opportunity to engage with stakeholders now to ensure the measure is fully ready for implementation and not rush through such a significant measure when there is still a plethora of unanswered questions,” the group wrote to the council on Monday.

It said it hoped to work to solve the same issues the council is eyeballing but in a slower process.

“We are ready and willing to help address the issue of climate change and we hope to have the opportunities to do so through a true and transparent process,” the group added. “The process should accommodate a thorough analysis of the measure to ensure it maximizes the benefits to our climate and Denver residents.”

The group was not the only to ask for more time. Councilwoman At-Large Debbie Ortega said she had concerns about how little the business groups had been consulted with and that she had questions of her own.

“When you’ve got something this big and impactful, this is where process matters,” she said. “The devil is always in the details and we need to know how this is going to work. I’m going to be asking a lot of questions at committee.”

She told Denver7 she has concerns that the companies might end up turning the tax into a pass-through to their customers and said she worried about how the tax might end up affecting Denver residents – aside from the groups.

“As we have become one of the most-expensive cost-of-living environments in the country, we always have to be cognizant of what does that look like to the end user,” she said. “My argument is we are doing a lot and we need to really understand what all of that is and then figure out – what are these other pieces.”

Clark, in an interview Monday, said that moving quickly was the only choice the councilors had because of the threat of climate change.

“Every article says we are not moving fast enough. And yes, this is going to be hard. This is hard work that we have to do over the next decade and we’re not going to be able to do it in the way that we have always done things,” Clark said. “We’re going to have to move quickly. Just because we’re moving quickly does not mean this is not a good policy. This is a good policy.”

He said that getting the votes done by the end of the month would be important to ensuring the measure gets on this year’s ballot, if the council approves – hence his urgency. And he said that there would be a further stakeholder and approval process if voters approve the measure.

“If we had another option, I would love to go back and do this slowly,” he added. “We don’t have the luxury of time. We don’t have the luxury of saying the right things and not taking action.”