Boulder voters will decide on a new climate tax this November

Hart Van Denburg/CPR News
On Boulder’s Pearl Street Mall, Saturday, July 30, 2022.

Boulder voters in November will decide on a new, expanded tax that would raise millions more each year for projects to help the city adapt to climate change. 

Boulder city officials proposed the tax earlier this year to replace two existing climate taxes that expire by 2025. The City Council submitted the question for the November ballot last week.

The new tax would raise costs for local residential, commercial and industrial electricity consumers to boost the yearly amount collected for climate resiliency projects to $6.5 million from $3.9 million, according to the ballot language. Average payments by residents would jump by 16 percent to $49.66 a year, collected in monthly electric and natural gas bills by the city’s utility, Xcel Energy.

If approved, the new measure would put a much greater share of the tax burden on local businesses and industries, whose annual climate tax payments would jump by an average of 67 percent, according to the measure.

City officials have said they hope the new tax’s structure prompts businesses and industries to reduce their electricity and natural gas use, thereby lowering planet-warming greenhouse gas emissions from the power generation sector.

“When the original carbon tax was created in 2006, since that time, businesses have paid roughly one-third of the annual tax collections and they’re responsible for emitting roughly two-thirds of our community’s emissions,” said Jonathan Koehn, the director of Boulder’s Climate Initiatives Department, in an interview earlier this summer.

“We’re really trying to true up that proportional impact in cost to make sure that the dollars collected are really going to those that are attributed to … emitting those emissions,” he said.

The climate tax would last through 2040, funding projects and initiatives to reduce greenhouse gas emissions and protect residents from the worst effects of climate change. They include:

  • Cash for residents, landlords and businesses to make their properties more energy efficient
  • More charging stations for electric vehicles
  • Microgrids and energy storage projects to improve the reliability of local power and use more energy from renewable sources like wind and solar
  • Assessing homes for wildfire risk
  • Burying power lines underground to lower the risk of igniting fires
  • Bill assistance for lower-income residents

In a survey conducted by the city, more than 70 percent of nearly 1,200 responders said they would vote to approve a new climate tax that raised $8 million a year. The city’s climate officials eventually recommended collecting $6.5 million, with $1.5 million earmarked for wildfire-related projects.

Another measure on the November ballot will ask voters to increase the city’s debt to $52.9 million to use the climate tax funds.

Boulder’s existing climate taxes — the Climate Action Plan Tax and the Utility Occupation Tax — were renewed multiple times by voters. If the new tax is approved by voters, the existing taxes will be repealed at the start of 2023.