Boulder City Council on Tuesday gave a thumbs-down to a pair of proposals that explored fees on cars and taxes on natural gas use to raise funds for the city’s work in fighting climate change.
At the direction of council, city staff outlined a vehicle climate fee and a natural gas tax to help the city meet its climate goals — a task that has become only more urgent as climate change predictions have become more dire and for which the city does not currently have enough revenue sources to address.
“(E)ven aggressive goals like Boulder’s Climate Commitment, are not going far enough, fast enough,” staff wrote in a memo to council.
Boulder’s 2017 greenhouse gas inventory showed that transportation fuels represented 28% of community emissions, while natural gas represented 21%. Once the city’s electricity supply is fully renewable and those emissions are eliminated, transportation fuels and natural gas will top 90% of emissions, according to city staff.
However, during a study session Tuesday, council expressed various reservations about both proposals and decided to defer action on them.
Vehicle climate fee
The first of the two proposals was a fee on vehicles based on their fuel economy.
To pay for all planned and related city programs, administer the fee and offset the remaining on-road emissions would cost an estimated $17.67 million annually between 2020 and 2030. To fully fund that would amount to an average $256 per vehicle, which staff cautioned against because annual registration costs an average $165, meaning the additional fee would nearly triple the average cost for drivers.
They instead recommended a lower amount, but council members questioned whether a lower fee would provide incentive for people to drive less.
“Do you feel like the way it’s structured it would serve as an incentive at all?” Councilman Aaron Brockett asked.
Replied Kendra Tupper, the city’s chief sustainability and resilience officer: “No, and that was the one of the key issues we identified.”
The fee would serve as cost recovery but would not drive behavior change, she said.
Another central concern of council was that a fee would not apply to in-commuters because Boulder has jurisdiction only over vehicles registered in the city. Of the approximately 104,000 jobs in Boulder, people who live outside city limits fill more than half.
Council also had a concern about what would be a complicated implementation process, as well as increasing costs for residents in other city initiatives.
“I just think people got their tax assessments, and we’ve heard from people about that,” Councilwoman Lisa Morzel said. “With any tax, we have to be very, very careful.”
Natural gas tax
The second proposal was a ballot measure to implement a natural gas tax. To pay for all of the planned natural gas programs would cost an estimated $3.2 million annually between 2020 and 2030.
Staff recommended, at a minimum, a tax rate that would cost $39 for the average single-family home and $23 for the average low-income affordable unit; $380 to $950 for a variety of commercial facilities; and $500 for an industrial facility using 50,000 therms, or units of heat, per year. They recommended a cap on the tax for the handful of facilities that use more than 250,000 therms annually.
They also recommended the tax be an addition to the city’s Climate Action Plan Tax, which currently taxes electricity and raises about $1.8 million a year.
Council expressed more enthusiasm for the proposal, but raised concerns about its timing in light of other tax measures coming down the pike.
“The tax on natural gas is at least simpler than the vehicle approach,” Councilman Sam Weaver said. “I’m in favor of this in general, but I think timing is a real concern here.”
He added: “For me, on the whole, this is where we have to go,” but said he wouldn’t support it on the ballot this year and instead would prefer to see it bundled in another year with other climate matters.
Brockett said he would have been open to moving forward this year. Mayor Suzanne Jones, too, lamented that the proposal’s timing would not work this year, but she noted the work in the proposal would continue to be relevant and could be considered again in years to come.
“I would have loved to move quickly,” Jones said. “… I do feel the urgency. I’m glad that this work will be relevant in the next couple years as well.”
As envisioned, both the tax and the fee would likely have included a rebate program for people who qualify as low-income or who are facing financial hardships.
Staff told council they are exploring with the county the idea of an “affordability portal,” in which residents can apply for programs and rebates in one place, rather than jumping through hoops to get the rebates in different places.
“This portal would act as a one-stop shop for those with low incomes or experiencing financial hardship to identify and apply for programs for which they are eligible and could allow a resident to apply for several rebate programs at once, reducing the annual burden from the various taxes and fees to which they are subject,” staff wrote in the memo.
Council showed enthusiasm for the portal, and the majority told staff they would like to see that come to fruition regardless of movement on the specific fee or tax discussed Tuesday night.