During her first State of the City address on Friday morning, Pueblo Mayor Heather Graham said there’s an $8.6 million shortfall in the city’s current $117 million budget. The budget itself is down 4.2 percent from the last fiscal year.
She said previous revenues were inflated by the influx of temporary funding and an unexpected $4 million sales tax payment.
“This was caused by one-time federal stimulus funds that were made available to the city during and following the pandemic,” Graham said. “The reality is those revenue sources were one-time in nature and have now ended.”
She said 62 percent of Pueblo’s budget comes from sales and use tax and that was down 7 months last year, along with an 8.8 percent decrease in lodging tax revenues during the same time frame.
Graham said she's also cutting expenses. She's reduced nonprofit and nondepartmental funding by 49 percent. She said she also eliminated 18 city staff positions.
“Capital improvement project funding in previous years has been upwards of $15-20 million per year,” but this year just $3 million was approved for projects, according to Graham. She also said 77 percent of other communities in Colorado have a higher sales tax rate than Pueblo.
Graham is also looking at ways to increase sales tax revenue - including a possible 3.5 percent tax on groceries.
“As a community, we have an opportunity to take the financial first steps to improve Pueblo's opportunities and its future,” she said. “Pueblo can have more and do more if we choose to invest in ourselves and find new ways to generate revenue.”
Graham said a ballot measure for the tax would need to be approved by both city council and voters later this year, and if it ultimately passes, it would be the first city tax increase in more than 50 years.
Neighborhood revitalization, riverwalk expansion and transit improvements are among recent successes that she noted in the speech.
The mayor lauded the city fire department’s improved emergency response times and management of increasing numbers of calls.
Additionally, she spoke about the police department’s enforcement efforts to address an increase in crime and public safety issues in Pueblo, including using data-driven investigations from the ShotSpotter and Real-Time Crime Center programs and forming new teams and units to respond to different types of situations.
Lack of consequences is one reason why crime has increased according to Graham, who said that offenders ignore citations, skip their court dates and continue to commit crimes.
The police department is dedicated to finding more ways to address these issues, Graham said.
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