Castle Rock council explores budget options

Town manager says review of new revenue streams needed to fund increased public safety demands

Thelma Grimes
tgrimes@coloradocommunitymedia.com
Posted 3/1/21

While restaurants and retail stores at the outlet mall and throughout the city suffered in 2020 and at the start of 2021, Castle Rock Finance Director Trish Muller said sales taxes for the town were …

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Castle Rock council explores budget options

Town manager says review of new revenue streams needed to fund increased public safety demands

Posted

While restaurants and retail stores at the outlet mall and throughout the city suffered in 2020 and at the start of 2021, Castle Rock Finance Director Trish Muller said sales taxes for the town were stabilized through revenue in grocery and merchandising sales.

In 2020, when toilet paper and other items were flying off the shelves shortly after the pandemic hit, it helped the town's sales-tax coffers. Of the town's $217 million budget, $55 million makes up the general fund. More than $25 million of the general-fund budget comes directly from sales taxes.

Food and merchandising makes up 30.8% of the sales-tax budget. In 2020, it increased by 19 percent.

Muller said while sales taxes increased by 7.6% in 2020, the outlet mall, restaurants/bars, and the apparel and accessories industries were hit hard by pandemic restrictions.

Tax revenue from apparel and accessories decreased by 23.8% in 2020, and restaurants/bars, which make up 10% of the sales-tax budget, decreased by 4%.

In 2021, Muller said she has a conservative forecast that sales taxes will stay on track at an estimated increase of 4%. Looking at 2022 and 2023, Muller said they expect a 3.5% increase.

Muller explained that the sales-tax part of the budget matters because impact fees and revenue collected from developers has limitations on how it can be spent, which means personnel costs come more from sales-tax revenues.

Town Manager David Corliss said while they approve a one-year budget by law each year, the town really works five years ahead.

“Currently, we are very dependent on sales taxes,” he said, “they go up and they go down. We are limited in our ability to diversify revenue.”

Corliss said revenue streams are going to be an important topic for town council moving forward. With a growing population, Corliss said the town is going to need more personnel in public safety, including the police and fire departments.

“This community has very high expectations for all of our departments,” he said, “particularly in public safety.

“I like the fact that we have a police department that can spend time with citizens and not run from call to call. My top priority is to give a healthy menu of next steps.”

One option Corliss brought up is a possible sales-tax increase. However, he noted that because of Colorado's Taxpayer Bill of Rights, any tax-increase proposal would have to be approved by voters.

Corliss said at future meetings, he will be presenting new revenue options to the council. Most of them revolved around increasing taxes in various forms, including property taxes, which Corliss said are some of the lowest in the front range.

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