New tax proposed in Central City
Voters to decide
“Our city needs help,” said Central City businessman, Don Boring. He owns Annie’s Emporium the little shop at the end of Main Street that serves as general store. That’s Boring’s take on the excise (admissions) tax the City Council has proposed and is putting to voters on this year’s ballot. (Early voting has already begun.) The revenue stream is dwindling, he said, and casino operators should not have to pay for everything. An excise tax is okay with him. He sees it as a way to help pay for infrastructure and city services. Central operates on a very small staff for a city its size, he notes and on a very low budget that “gets the most bang for our buck.” “We need to protect our community and this (excise tax) is a good place to start,” he said.
The excise tax is not okay with the Central City Opera House Association (CCOHA), who would bear the brunt of the 5% tax levied on ticket sales for any event that charges admission, nor is it okay with some of the non-profit organizations that draw clientele from the opera crowd (Gilpin County Arts Association, Ermel’s Thrift Shop) or those who charge admission for their own events (GCAA, Gilpin Historical Society, Peak-to-Peak Chorale). Representatives from these organizations convened a town hall meeting, October 22nd, in the Teller House, hoping to spread the word to fellow Central City residents to vote against the excise tax. About 30 people attended and listened to speakers representing CCOHA, GCAA, GHS, Ermel’s and Peak-to-Peak Chorale. Pelham Pearce, General/Artistic Director for CCOHA said a 5% tax on tickets isn’t the solution.
Central City Council decided to put the question to its residents because they need more revenue for city operations. According to Central City Manager Lynnette Hailey, the excise tax will raise approximately $50,000 in additional revenue, annually. How the funds are used will be up to current and future elected aldermen. The ballot question states “expended for city facilities and services.” It’s likely some will go to an infrastructure used by residents and visitors, alike. The City has suffered through at least three water line breaks in the past year and, for several days, had to place port-o-potties around the business district until repairs were made, inspected and approved. Street repair is an ongoing issue that could benefit from additional capital. Central has also cut several employee positions over the past two years. City Manager Hailey now also serves as City Clerk; the Public Works department is a staff of six; and the Police Department has been reduced.
Central City officials acknowledge the proposed tax would most impact CCOHA. They point out that, as a non-profit organization, CCOHA pays no property taxes on approximately 30 residential and commercial properties they own around town. If those properties remained on the tax rolls and were taxed at the 2009 assessment, they would produce nearly $70,000 in revenues with approximately $20,000 disbursed to Central, and the rest disbursed between Gilpin County, Gilpin County School and the Black Hawk/Central City Sanitation District. City officials see the excise tax as a way for CCOHA to help pay for their use of the city’s infrastructure and services.
CCOHA President Lanny Martin said the association is struggling. It costs $70,000 for each performance in the Opera House. Last year the association sold tickets amounting to $950,000 and had to raise $3 million to operate. “We live on donations,” he said, “and debate if we can go on another year.” In 1981, the economic situation was so bad, CCOHA didn’t open at all. “We went dark for a year and considered closing,” said Martin. CCOHA budgets $500,000 for annual maintenance of their Central City properties. That keeps the properties in good repair and habitable (most for the summer only, as they have no heating systems). Martin said CCOHA supports the community by hiring local people and using local suppliers whenever possible. Each summer they bring around 150 artists and support staff who live, and spend, in Central City. Buddy Schmalz of Dostal Alley said the opera folks are frequent customers and Boring concurred that CCOHA’s employees are “good citizens while they are here.” Linda Jones, speaking for the thrift shop, said the performers often shop there for household goods and stage props (and then give them back at the end of the summer so they can be resold). Martin said performances draw 15,000 opera patrons into the community during the eleven week season. They shop the art gallery which is not open year-round, thrift shop, which opens an additional day each week during opera season, and antique stores so, while the excise tax would directly impact these shops very little (or not at all), any reduction in the opera crowd could reduce their sales. These shops are all on Eureka Street, an easy walk from the Opera House and CCOHA-owned Teller House at intermission or between performances. Few patrons seem to turn the corner, however, to the casinos along Main, although they do park in the Big T lot (provided and paid for by casinos).
Several residents mentioned that all communities are facing financial difficulties, as are private citizens. Most called for a cooperative effort, perhaps an economic development committee, a partnership between CCOHA, businesses and the City to find a solution. Central City officials and businessmen have said they’d like to see CCOHA operating through August and September (also considered good tourist months) rather than closing after the last opera performance in the middle of August. They’d like to see the opera association host more events during the “off” season. The mayor has had several discussions with them about that, said Hailey. CCOHA did perform four different operas in 2007, (versus the usual three) in honor of the 75 year anniversary and, in honor of this year’s sesquicentennial celebration, worked with the historical society to offer additional events. “We want to be helpful,” said Martin, “and we’re sorry we haven’t been perceived as helpful. Maybe we can make some of our properties available for fundraising.” Pearce said CCOHA was open to ideas. “We need to create a partnership with the City of Central and local businesses and develop a shared vision of what the future should look like,” he said.
Such a partnership will need to include the gaming industry and CCOHA will need to work to build that relationship. Minutes from the September 2008 meeting of the Black Hawk/Central City Visitors and Convention Bureau show a funding request from CCOHA of $75,000. The Bureau had funded $20,000 the previous year and might have funded at least that much again. They asked CCOHA’s Board to pass a resolution supporting Amendment 50 (enhanced gaming) in support of their host cities and county. CCOHA’s Kevin Mynatt told the Bureau that wouldn’t happen as many of the opera patrons did not support gambling. Martin confirmed CCOHA did not take formal action, preferring to encourage individuals to act on their own initiative The result of CCOHA’s failure to take a public stand of support was the Bureau discontinued funding and CCOHA had eliminated a valuable stream of revenue.
If approved by the voters, the excise tax will apply to all events for which admission is charged, including those of the Elks, Masons, Central City Events Center, political parties, churches, etc. and these groups would likely raise their ticket prices. For example, GHS is opening their museum tomorrow night for a ghost-story Halloween event. Tickets are $8.00. If the excise tax were in effect, they could cover it by charging $8.40. The tax would increase opera prices by $2.50-$5.00 per ticket. Much of it would be paid by out-of-towners, here for limited events.
At least 25 Colorado cities have levied separate admission taxes ranging from 2% to 15%. Other cities have applied their sales tax to admissions fees. Admissions tax is simple; easy to levy and easy to collect. It falls mostly on nonresidents and tourists and applies only to a discretionary service. The down side is that admissions taxes do not produce as much revenue as taxes on property or sales and, because they’re based on entertainment and tourism and thus heavily influenced by economic downturns, the revenue stream is unpredictable and unstable. Most of the people attending the town hall meeting were against the tax. Central City Alderman Tom Reilly listened throughout the meeting and Mayor Ron Slinger stopped in as the meeting began and returned toward the end (taking a break in the middle to attend a parent-teacher conference). Both fielded questions. If the excise tax is not passed and the City must make budget cuts, the residents were asked, “What are you willing to give up?” One resident responded she would give up free trash pick-up in lieu of the tax. Free trash and recycling pick-up for residents costs the city more than $42,000 annually; money that could be put to other uses. The Water Fund, even with a $33,000 transfer from the General Fund, will likely come up at least $100,000 short this year. Water rates were increased last year, residents noted, (however not by enough to pay for actual operations). In order to keep the city going, officials must either find more revenue or consider budget cuts. They will look to their constituents’ votes for direction. .