Denver voters Tuesday were divided over Mayor Mike Johnston’s plan to raise the city’s sales tax by 5 cents for every $10 spent in a bid to dramatically expand the affordable housing stock in an increasingly unaffordable city.
The race remained too close to call at 11 p.m., with 48% in support and 52% opposed.
Proposed by Johnston and referred to voters by the Denver City Council, Ballot Issue 2R would raise an estimated $100 million a year, the largest ever expansion of a local government affordable housing program in Colorado’s history.
Concerns about the cost of living, however, cut both ways. The measure would raise the city sales tax to among the highest in the state — 9.31% or higher, pending the outcome of a separate ballot measure to raise sales taxes for Denver Health.
Sales taxes are generally considered regressive, because the less money you make, the more of your income you spend on them. A sales tax hike could disproportionately raise costs on some of the very people the program is trying to help. Notably, the sales tax increase would not have applied to many essentials, such as food, fuel, medical supplies and some personal hygiene products.
City officials say the funding would allow Denver to add more than 40,000 affordable housing units over the next decade, enough to meet its projected need for low-income housing over that period.