Golden City Council passes new sales tax law, talks budget

Paul Albani-Burgio
palbaniburgio@coloradocommunitymedia.com
Posted 7/28/20

July 23 was a busy night for the Golden City Council as they tackled and discussed issues ranging from the city's current budget situation to the formation of a new committee dedicated to justice and …

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Golden City Council passes new sales tax law, talks budget

Posted

July 23 was a busy night for the Golden City Council as they tackled and discussed issues ranging from the city's current budget situation to the formation of a new committee dedicated to justice and equity.

Here is a closer look at those significant discussions and actions (plus one other).

COVID-19 budget impact

Golden has not escaped the impacts of the COVID-19 pandemic but the city's overall financial picture remains strong, Golden's Finance Director Jeff Hansen said in a budget update.

Sales tax revenue was down 550,000 through May, a 7.5% decrease from last year and 8.7% less than what was budgeted. However other revenues, including those from property taxes and Golden's use tax, are up.

Despite the sales tax decrease, overall revenues into the general fund are up by 9% from last with fund revenues exceeding expenditures by $2.8 million. Hansen said a large portion of that increase can be attributed to Golden receiving the first payment of its CARES Act money from Jefferson County and some of that money will need to be distributed to other funds that had expenses related to COVID-19. However, the fund should remain in a good position even after those revenues are redistributed, he said.

One unsurprising trouble spot for the city are the funds for facilities that could not operate for portions of the year, including The Splash at Fossil Trace and the Community Center. The city will likely need to cover those shortfalls with money from the general fund. Substantial CARES Act funds will also be able to be used to cover portions of the community center budget.

“I think we are weathering the impacts of COVID-19 stronger than some peer cities because we've maintained strong reserves in the past, have a diverse sales tax base that helps offset some areas been hard hit and we've done a good job of keeping expenditures under control,” Hansen said.

Sales tax ordinance

The city council unanimously passed an ordinance that will require online retailers to collect sales tax on items sold to Golden residents.

Previously, the city encouraged retailers to voluntarily collect sales tax, but such collections will now be required, Hansen said.

The city is not likely to see a huge increase in sales tax because the largest online retailers, including Amazon and Wayfair, are already generally collecting applicable sales taxes, Hansen said. However, he predicted there will be a modest impact due to the many smaller retailers have not been collecting it.

Hansen called the ordinance a win/win because it will increase city sales tax collections while leveling the playing field between online retailers and brick and mortar businesses in Golden.

“In this era of COVID-19, I really appreciate that Jeff has pushed this through because I think there is going to be more and more online retail so I think this is really crucial,” said Councilman Rob Reed.

New committee

The city council voted unanimously to form a justice, equity, diversity and inclusion subcommittee.

According to the resolution, the subcommittee will gather research and information to inform city council conversation related to those issues and frame discussions that will come to full council for consideration.

The subcommittee will consist of two councilmembers who will serve one year terms as well as a staff person assigned by the city manager. Councilmembers Rob Reed and JJ Trout and Deputy City Manager Carly Lorentz will start out on the subcommittee.

“I think the discussion we will have at the end of August at our council retreat will allow council to provide some more specific expectations and scoping of the topics for the committee,” said Mayor Weinberg. “But I think we have a good structure in place”

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