MANITOU SPRINGS, Colo. (KOAA) — Manitou Springs faces a potential $4.3 million budget shortfall next year following the failure of ballot measure 2A, according to estimates from the mayor's office.
The shortfall stems from declining marijuana sales tax revenue, which has been a significant funding source for the city.
With 2A's defeat, city officials are scrambling to find ways to balance the budget while maintaining essential services.
"If we know we're gonna retire, we'll have less money, so we plan for it. And it didn't look like the city planned for it," said Don Wallace, a Manitou Springs homeowner since 1978.
Wallace believes the city should have saved money during better financial times instead of spending it. He says trust must be restored between the city and voters before he would support any future tax increases.
"This was done quietly. Nobody really knew about it, it hit everybody, and they were surprised," said Wallace.
The mayor says Manitou Springs already operates on a "flat" budget this year, meaning only essential spending is approved. City positions are being combined in some cases to reduce costs.
With 2A's failure, capital improvements would take the biggest hit. Items like snow removal and park maintenance efforts would be reduced to prioritize police and fire services. The city would need to tap into its reserves, which were built up thanks to marijuana sales tax revenues.
The mayor estimates a $3.3 million shortfall this year and $4.3 million next year. City officials have identified $580,000 worth of cuts and will repurpose $1.5 million from the parking enterprise to help offset next year's shortfall.
For residents, this could mean a property tax increase proposal in a future election. Amy Vagelatls, who lives in Manitou Springs, opposes such increases.
"Where's all the money gone?" said Vagelatls.
She says taxes for living in Manitou Springs and supporting local businesses are already too high, claiming she may move out of state because of the tax burden.
"We're ready to leave this state because of that," said Vagelatls.
Manitou Springs currently has a 9.03% sales tax on goods and services. According to the mayor, the city itself only receives half of that revenue.
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