Manitou Springs is considering raising recreational pot taxes. Here’s why.
Author: Debbie Kelley, The Gazette - April 9, 2018 - Updated: April 9, 2018
Along with reducing tourism, the potentially permanent closure of the Pikes Peak Cog Railway also could derail city funding of security officers at Manitou Springs schools.
As city leaders scramble to address a projected annual tax revenue loss of $500,000 from the train closure, they say they can’t consider such a request from Manitou Springs School District 14.
But school officials suggest the city could raise recreational marijuana taxes, an idea city officials are considering.
“No decision has been made, but we’re investigating the possibilities,” said Manitou Springs Mayor Ken Jaray.
D-14 wants funding for more security officers starting this fall, said Superintendent Ed Longfield.
The city and D-14 already split a $75,000 salary for one Manitou police officer to work at the middle and high school campus.
The “easiest and fastest solution,” Longfield said, would be to raise the tax on the town’s two recreational marijuana stores.
“I believe it is the responsibility of our local government to protect our citizens, including our school children,” Longfield said in an email. “The school doesn’t have to expend money for its own fire department.”
Recreational pot sales in Manitou now are taxed at 25.03 percent, including the city’s 6 percent tax. Under a 2013 municipal ballot measure, the City Council can raise that rate up to 10 percent.
Jim Bent, vice president of operations for the Emerald Fields marijuana store, declined to comment on the proposed tax boost.
Maggie’s Farm, the other pot store, did not respond to requests for comment.
Manitou has the only recreational pot shops in El Paso County.
Since they opened in 2014 and 2015, a booming pot trade has helped the small town nearly double its general fund, upgrading storm drainage and roads, preparing for natural disasters, and undertaking other improvements.
Because Manitou has fewer than three pot stores, the state doesn’t require disclosure of sales and tax collections.
But the Manitou budget’s “other” category for businesses, including marijuana, saw sales taxes rise from $3,325 in December 2013 to $74,168 in December 2014 and to $279,377 in December 2017.
The day Manitou Springs leaders found out that the cog railway won’t reopen anytime soon, D-14 officials asked the council for a $20,000 emergency appropriation to pay for a security guard for the rest of this school year. The council didn’t act on the request.
So the district instead is paying for the guard from its operating budget so all three campuses have guards on-site, Longfield said.
The district has spent $400,000 over the past few years to heighten school security, he said, and it would like two more police officers to work on its three campuses next year.
The district also has requested financial help from the Green Mountain Falls City Council to add security at Ute Pass Elementary School in that community.
Until the Manitou Springs budget gets hammered out, town leaders can’t commit to that expense, Jaray said.
But, the mayor said, “The board expressed their support to work with them to make sure our kids are safe.”
Said school board member Natalie Johnson: “No council wants to go on record not supporting safety in schools, so they were really in a situation where they felt like they wanted to support the school district and didn’t want to vote it down.
“But they can’t until they figure out their budget for this year.
“This is larger than school security or marijuana funding. We’re all in this together, and our City Council and school board are going to be actively working on problem solving around our kids’ mental health and well-being.”
Last year, the district began receiving $50,000 in city funding for Partners for Healthy Choices, a health and wellness initiative that had been funded by a grant.
“We have had a simply outstanding relationship with our City Council,” Longfield said. “They believe in supporting education and understand the importance of partnership.”
The Broadmoor hotel, which has owned the cog railway since 1925, unexpectedly announced last month that the train can’t resume operating this summer because its aging tracks, rail cars and other equipment might not be safe enough.
A study to determine the cog’s viability will take several years. The Broadmoor is owned by The Anschutz Corp., whose Clarity Media owns The Gazette.
Until more is known, Jaray said, “We’re looking at our different revenue options, trying to deal with temporary closure of the cog railway.”
At a March 27 work session, the council examined every revenue and expense item in the town budget.
“It’s pretty discouraging, any time you don’t have enough money,” Jaray said.
The estimated $500,000 revenue shortfall is a low-end estimate, said city Finance Director Rebecca Davis.
“We don’t really know the secondary effects – how many people come here and ride the cog and go shopping or have lunch,” she said.