Pueblo facing tax revenue shortfall, consumer turnout in decline - KOAA.com | Continuous News | Colorado Springs and Pueblo

Pueblo facing tax revenue shortfall, consumer turnout in decline

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Problems could be on the horizon in Pueblo after the city's sales and use tax fell short of expectations in 2017.

Currently, the City of Pueblo is on track to add 45 people to the workforce between 2018 and 2020.

This is made possible thanks to a sales tax increase voters passed in November but what happens next will largely depend on consumer turnout in the next few months.

Charles Sole, the owner of the Hanging Tree Cafe, says he's seeing a drop in customers and in revenue.

"This winter has been a little bit slower than it usually is," Sole said. "The past three years have been pretty busy for winter."

After crunching numbers for the city's revenue in 2017, City Manager Sam Azad said sales and use taxes failed to meet his revenue projections by about $1.5 million.

"A lot of it has to do with consumer sentiment, you know, if they get bad news," Azad said, "they pull back."

The bad news, according to Sole, might be the tax  hike in the first place.

"A lot of people are kinda strapped and kinda scared to spend money right now," Sole said.

"It definitely weighs on a business."

Still, the increased sales tax is providing benefits, such as 24 new police officers over the next two years.

But if the revenue from the use and sales tax continues to dip and goes into the negative range, a hiring freeze would be put in place to balance the budget.

"We just have to monitor it closely," added Azad. 
"If the signs come in and we may be facing something negative in a short period of time, then we'll have to take some fiscal actions."

Azad also noted he'll know more once the first fiscal quarter wraps up in April and he'll present his report in front of city council at that time.

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