She was absent from the proceedings Tuesday night, but councilwoman Cindy Carlisle still made her presence felt by proposing an old solution to the perceived employment imbalance in Boulder: a head tax on workers.
“Boulder’s thriving job market shows no sign of slowing,” Carlisle wrote in a letter shared at the meeting. “While creating a strong economic environment, this excess of jobs creates costs for the community. Residents, who are impacted by ever-escalating property taxes, bear the costs of this growth.”
The “occupational privilege tax” would “apply to individuals earning over a certain dollar amount per month in the Boulder City limits.” Carlisle did not explicitly suggest what those limits should be, but shared figures from Denver, which charges an OPT for all employees earning $500 or more per month.
“Even a more conservative tax on businesses applied to those earning $1,000 per month would make a big difference in funding increased costs created by businesses,” she wrote. In a followup interview, Carlisle said she didn’t have specific limits in mind but that she will intends to research and explore the issue.
Other Colorado cities also employ a head tax. Aurora charges $4 per month for workers making $250 or more, split evenly between employer and employee. Denver’s is higher, at $5.75 “withheld from (the) wages” of workers, according to an FAQ on the city/county site. Businesses get a better deal: $4 per month business OPT for each taxable employee.
Greenwood Village, Glendale and Sheridan also have OPT, as do a smattering of cities around the nation.
Some communities levy the tax only on companies of a certain size, either by workforce numbers or total revenue. Seattle went that route with a head tax intended to fund efforts combating homelessness; that was ultimately defeated in the face of vehement opposition from Amazon.
Carlisle said she hadn’t yet investigated different options for levying the tax on businesses based on company size or income, but indicated support for taxing bigger, wealthier companies that bring with them employees, traffic and heavy use on Boulder’s infrastructure. It’s only fair they pay for those.
“It’s the businesses that locate here that I would like to see bear the brunt of it,” she said. “My thought is (the money) would be a lot for housing,” particularly at the old Boulder Community Hospital site on Alpine-Balsam and Broadway, where she would like to see a “housing-first” approach.
Critics of the measures argue that a head tax discourages business activity and employment, penalizes people for working, and places an unfair burden on those least able to afford it. Retired people or those who are well-off enough to not work don’t pay.
Carlisle said she would pursue an equitable approach where the tax was paid primarily by businesses, not workers, although she acknowledged that companies could simply pass the costs along.
Proponents of head taxes, including Carlisle, note that rising property taxes are a casualty of economic growth. Homeowners, she argued in her letter to council, were paying a “disproportionate” share.
Property taxes do make up 13 percent of Boulder’s revenues, according to an October presentation on the budget. But sales and use tax make up the bulk, contributing 38 percent.
That money comes from businesses and those who utilize them, said John Tayer, president and CEO of the Boulder Chamber. Commercial properties — offices, restaurants; in short, places of employment — also pay significantly higher property taxes than homeowners because of Colorado’s Gallagher Change made to existing documents, resolutions, or ordinances.
“To just say that we’re going to charge workers and employers for doing business in Boulder, it ignores all the value businesses are already contributing,” Tayer said.
Moreover, the city itself is among the largest employers in town, along with the university and federal labs. It’s unclear if head taxes can be levied on government workers.
A head tax has been proposed in Boulder before, in 2016. That council considered sending it to the 2017 ballot, but ultimately declined.
That’s the right approach, City Attorney Tom Carr said Tuesday. There has been “lots of analysis” around the issue in the past, he sad, but, “it’s really a ballot measure question.”
The issue may be discussed at council’s annual retreat on Jan. 18, if enough members want to add it to the agenda for 2019.
Author’s note: This story has been updated with comments from Cindy Carlisle.
Growth and Development Boulder Boulder Chamber business Cindy Carlisle city council city of Boulder Denver Gallagher Amendment Glendale Greenwood Village head tax industry jobs John Tayer occupational privilege tax OPT property tax sales tax Sheridan taxes Tom Carr use tax