Littleton's $6.5M Annual Revenue Shortfall: What To Know

LITTLETON, CO — Littleton is among many Colorado cities that are facing a revenue crisis in the wake of the pandemic.

Littleton faces a $6.5 million annual revenue shortfall in its Capital Projects Fund, which pays for roadway maintenance, building enhancements and other infrastructure projects, officials said. The fund is set to reach zero in four years, according to Tiffany Hooten, the city's finance director, who explained the shortfall at Littleton's State of the City breakfast Wednesday.

The city's weekly Littleton Report offered an overview of the event, and explained that the city has a $98 million list of more than 70 unfunded capital infrastructure projects over the next 15 years.

The report listed four factors for the shortage:

1. Increasing capital and infrastructure demands - the list of projects that need funding for maintenance and improvements continues to grow
2. Rising maintenance and repair costs - as projects are delayed, materials and labor become more expensive
3. Unreliable revenue streams - Littleton doesn’t have many large-format retailers to generate a large volume of sales tax revenue and revenue from use taxes are dwindling
4. Fewer fees and taxes - the current three percent (3%) sales tax rate is lower than the metro-wide average and has not increased in 50 years; additionally, Littleton doesn’t collect many other fees or taxes (street lighting, business license, lodging, etc.)

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The city has hired a team of consultants to conduct research on potential funding solutions. The team is gathering community feedback to help develop a path forward, officials said.

No decisions will be made until enough feedback is collected from Littleton residents, the city said.

Here is an overview of potential funding solutions from the city so far:

• A retail marijuana tax increase that would provide $500,000 to $1 million per year
• A new lodging tax on hotel and short-term rental guests that would generate up to $1 million per year
• A 0.5 percent sales tax increase ($.50 on a $100 purchase) that would generate an average of $6.5 million per year
• A 0.75 percent sales tax increase ($.75 on a $100 purchase) that would generate an average of $10 million per year
• Eliminating community assets like Bemis Public Library and the Littleton Museum that would create an annual savings of $4.2 million in the General Fund

The city is set to host a telephone town hall June 30 and public meetings throughout July, but the details of the feedback sessions have not yet been announced.

The team of consultants is set to make recommendations to City Council in late July, and make a decision in August on a path forward, according to the Littleton Report.

>> More information about the city's funding shortfall can be found here.