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Manitou Springs Budget Shuffle: $3M Weed Tax Dip!
The city of Manitou Springs is making cuts and shifting funds in its mid-year projected budget to offset marijuana sales tax losses, while a court case continues over its budget appropriation decisions.
The city is expecting to lose about $3.2 million from its "other" sales tax column this year, Finance Director Rebecca Davis said. The majority of the loss can be attributed to the city's two dispensaries. The city halved its marijuana sales tax to come in line with Colorado Springs, which voted to allow recreational sales this spring.
Davis said the changes have prompted a "re-examination" of the budget from City Council and department heads.
"They were looking for reductions due to our new reality," she said in a meeting with City Council last week.
Manitou Springs was the first municipality in El Paso County to allow recreational marijuana sales in 2014, leading to a significant jump in revenue for the mountain town west of Colorado Springs. With its metro neighbor adding recreational sales this spring thanks to a successful ballot measure, the Manitou Springs City Council decided earlier this month to drop the city's marijuana-specific sales tax rate from 10% to 5%.
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