Amid budget shortfall, Loveland residents may create new sales tax to replace tax they cut last year in Colorado
Less than one year after Loveland residents overwhelmingly voted to eliminate sales tax on most groceries, a shortfall in the city's budget has now led to some residents asking for a new sales tax to be created. The tax cut, which only applied to groceries purchased for at-home consumption, has now resulted in the city losing millions of dollars in revenue.
As CBS News Colorado reported in the fall of 2023, the city warned residents that approving the tax cut would force funding to city services to be cut. The city's planners forecasted that the budget lost would not be deducted from public safety services like police and fire. However, they predicted that entities like the city's parks and recreation and libraries could face cuts.
Now, less than a year later, some say that is exactly what is happening.
The city confirmed to CBS News Colorado that they have started their planning phase for a reduced services budget in 2025 as a result of a budget shortfall.
While not directly linking it to the sales tax cut from groceries, a spokesperson for the city confirmed the city's library was also preparing for reduced hours amid staffing shortages. Some residents told CBS News Colorado that was a result of some fearing of the budget shortfall impacting their job security.
"There is a 10-to-13 million dollar budget shortfall," said Leanne Lindberg, a resident in Loveland.
Lindberg and Caitlin Wyrick are among those with the group "Save Our Services, Loveland," or SOS. The group of Loveland residents are advocating for the city to create a new 1% sales tax to offset the lost revenue, saying they believe residents approved the groceries tax cut in 2023 without realizing what that meant for the services they have become accustomed to.
"They don't realize the impact that the 3% on a budget would have effect," Lindberg said. "To them it is pennies on their groceries. They don't realize that pennies add up to millions of dollars."
One of the most immediate and visible examples of the budget shortfall can be found directly outside of city hall, where the popular Foote Lagoon remains in disrepair.
The lagoon was a popular place for people to gather around. However, it has remained largely empty, with the remaining water a green color.
The city confirmed they have not found the leak causing the issue with the lagoon, and added they also have not found the budget to explore such repairs.
"Our concerns are if you cut, it is like a savings account. You always mean to get it back and you never seem to," Lindberg said.
Aleta Davy, a resident not affiliated with SOS, said she loves the library and knew about the hours being cut. As she left the library after picking up three books, she told CBS News Colorado she wasn't as worried about the budget impacting the library as she was its impacts on other services with less wiggle room in their budgets.
"It is not a huge change, there are just so many other programs and things that could be really impacted by cuts," Davy said.
Davy said she wasn't sure at this time if she would vote to create a new sales tax, or not. However, with the information she has, she felt the creation of a new sales tax may be the easiest answer to fixing the budget for services. She said she would not make a decision on which way to vote until she could read the exact measures of the proposal.
CBS News Colorado contacted George Garklavs, a Loveland resident, seeking his opinion on the proposal to create a new sales tax. Garklavs was an outspoken advocate for the measure that eliminated the groceries tax and celebrated the voters' decision in 2023.
In a statement, Garklavs wrote:
"After the sales tax on food for home consumption was voted out during the last election, the city portrayed that as the cause of a substantial shortfall to the city's revenue, causing a need to cut personnel and services. But further review of variability in Loveland's historic general fund indicates that there has been a long term imbalance in the revenue/spending ratio, and that the food tax issue may have simply brought this problem to the forefront. The city has yet to identify what has caused this long term imbalance, but rather is pursuing a quick fix by asking for a sales tax increase. The proposed sales tax increase seems far greater than estimated net tax revenue loss as indicated by current budget numbers. Considering the number of tax increase measures on the upcoming ballot I wonder how voters will respond when weighing these against their own financial situations."
However, Wyrick said she believes the amount of money people are individually saving each year does not outweigh the services they are now possibly losing.
"Everyone will be impacted by this. We will no longer be a full-service city. It will be kind of basics. We all value those services, that is what makes Loveland. That is the culture. Losing it has a huge impact," Wyrick said.
