A panel was formed this week to study and suggest changes in city services and how they’re funded, with an eye to the April 2009 ballot.The Sustainable Funding Committee, appointed Tuesday, consists of 21 members handpicked by Colorado Springs City Council members.The panel includes developers, neighborhood activists, politicians and business people.Although the council has complained for years about skimpy budgets, the economic slump helped trigger the committee.Last year, the city froze hiring, travel and some projects to shave $9.6 million from its budget due to sales tax declines. This year, sales tax revenues are expected to fall short of projections, and already are behind 5 percent.Although the city would receive $19 million to $22 million from El Paso County’s proposed 1 percent sales tax if voters approve it in November, the city isn’t sure it wants to go that route.City budget director Lisa Bigelow said the county’s measure complicates the city’s options, and the council is expected to decide whether to support the county measure on June 9.”They’re promoting a sales tax increase, and the city’s budget is already precariously dependent on sales tax,” Councilman Randy Purvis said. “It’s way out of balance.”City sales tax revenues account for 54 percent of the city’s $235.8-million general fund budget, the largest source, while property tax brings in just 9 percent.The sales tax is susceptible to economic fluctuations, as demonstrated in the last two years, while the property tax doesn’t waiver as often and dramatically in a down economy.While a down economy can affect property values, and, therefore, taxes, it happens much slower and the variations usually are less dramatic. Because they happen slowly, governments can plan ahead.If property values dropped 20 percent, it would take more than a year for a tax-supported agency to see a revenue decline – enough time to ask voters to freeze or raise property tax rates to compensate for the lower values.Purvis said while the sales tax is frequently favored because it “exports” the tax burden to people outside the community and tourists, its variability plays havoc with budgets.He also said an ever-rising sales tax undercuts local sales as shoppers turn to the Internet where transactions don’t include Colorado Springs’ sales tax.”Every time you raise the sales tax you lower that balance point where it’s cheaper to buy online than go to the store in town,” he said. “Rather than continuing to punish local merchants by making them less competitive with the Internet by raising the sales tax, we’ll get more balance by having a higher property tax and by being less reliant on sales tax.”Purvis said it also makes sense to fund services that are associated with property, such as fire and streets, with a property tax.Bigelow said the committee will look at city revenues for the next decade, not just a year or two out, to avoid repeated trips to the ballot as in the past.Voters approved the Trails, Open Space and Parks sales tax in 1997 and extended it in 2003 until 2020; the public safety sales tax in 2001 and the Pikes Peak Rural Transportation Authority sales tax in 2004.As for spending, the committee will review what the city pays for and ways to team with other agencies to provide services, such as the county. Besides facing rising operational costs, the city needs money for technology upgrades, new vehicles and a north fleet facility to speed snowplowing response and save fuel.If nothing else, an April 2009 measure likely would propose continuing a small mill levy approved by voters in 1989 to fund Powers Boulevard and the Police Operations Center, which will be paid off next year.Purvis said the committee may even call for lowering the sales tax and raising the property tax to make the city’s revenue more reliable and to provide “an incentive to help sell it to the public.”But Purvis realizes the very reason the city is in a bind might doom a ballot measure.”It’s tough to sell any kind of tax increase in a down economy,” he said. “People look in their wallets and frequently vote accordingly.”The committee holds its first meeting in late June and will report to council at year’s end.CONTACT THE WRITER: 636-0238 or pam.zubeck@gazettedev.gazette.com

Mr. Biggs Chief Operating Officer Matt Van Auken, left, and CEO Steve Bigari are ready for the opening of the third Mr. Biggs location. Photo by