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Federal Heights proposes entertainment admissions tax

Federal Heights proposes entertainment admissions tax

Water World, Pinnacle Events Center, could be affected

Published Thursday, August 13, 2009

Page 1a

Westminster Window

By Clayton Woullard

Contributing Writer

Voters in Federal Heights could be asked this November to approve an admissions tax credit that would generate up to an estimated half million dollars in revenue.

The 4 percent tax would affect those who attend entertainment venues, including strip clubs and bars that charge a cover, and events held by businesses or organizations at churches or schools. This would include the city’s entertainment money-maker, Water World.

The Federal Heights City Council is expected to approve the ballot question at its Tuesday meeting.

City Manager Dave Blanchard explained the need for the tax during an interview on Friday. He said Federal Heights, like most all cities in the region, is facing increasing costs – the city has $8 million in revenue and $8 million in expenses – and establishing an admissions tax on local entertainment would bring and extra $500,000 per year in revenue.

Blanchard said the tax is “as fair as possible” in relation to admissions taxes of other cities and towns. He added the tax would not affect the revenue of such businesses as Water World, but said those businesses could coud counter and say the tax is a hindrance to their sales.

Only those who attend the entertainment venues would pay the tax and that revenue would go into the city’s general fund. Blanchard said this tax of choice is preferable to raising property taxes.

“Our property tax level is very attractive in Federal Heights,” he said. “But still it’s a burden for a lot of our citizens to pay.”

Because Federal Heights has such a small land area, 1.7 square miles, the city of about 12,000 doesn’t have a lot of the same revenue sources other cities have, Blanchard said.

“We’re just trying to meet our needs. We do not wish to be greedy,” Blanchard said. “And then if we’re looking at what our projected needs are the revenue from this would allow us to present a balanced budget and in fact it would help us to go ahead and proceed with some of the things we have not been able to do because we have not had enough money.”

City Council also discussed the proposed resolution Aug. 3 in a study session after Blanchard spoke about the need for this measure. Blanchard laid out where property tax money goes in Federal Heights – out of every $100 a Federal Heights resident pays in property taxes, $25 goes to Adams County, $3.42 to Rangeview Library District, $65 to the schools, $5.18 to the Hyland Hills Recreation District and 63 cents to Federal Heights.

Council member Dick Hutchinson said he thought it would be fair to tax admissions for church dances, but that fund-raising and educational events should not be taxed.

Council member Richard Steele disagreed, saying at a local church it costs $7 to get into the dance and that money goes back to the church.

“I think your answer to the public is that this is not an attempt to gouge anyone,” Steele said. He added he spoke with a pastor who supported the measure, which drew ire from council member Dale Sparks.

“It really upsets me that anybody, unless you were given authority by somebody, would go to anyone in the community and talk about something we haven’t even decided upon,” Spark said. He stressed that the council has one shot at this. If the ballot measure fails, it would have to wait two years to put it up to vote again.

The potential ballot measure would be the first in the city since 2002 and, if passed, should go into effect Jan 1, 2010.

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