HomeMy WebLinkAboutMemo - Read Before Packet - 6/13/2023 - Memorandum From Travis Storin Re: Read-Before: Large Emitter Tax ProjectionsFinancial Services
215 N. Mason Street
PO Box 580, Fort Collins, CO 80522
MEMORANDUM
Date: June 13, 2023
To: Mayor and City Councilmembers
Through: Kelly DiMartino, City Manager
From: Travis Storin, Chief Financial Officer
Subject: Read-before: Large Emitter Tax Projections
The purpose of this memo is to: 1) apprise Council of 2 minor modifications the presentation materials
and 2) provide historical context of changes in the Large Emitter projections over time.
1) Minor clarifying edits to materials
Slide 9, which summarizes the currently proposed tax package, has been clarified to:
a) Specify that commercial property tax estimates are based on a $432,000 property valuation (the
2019-2021 median valuation), and
b) Remove language about the impact of substance tax, given that this is not part of the current
package.
The revised slide is attached to this memo.
2) Updates to Large Emitter projections
Shortly prior to publishing presentation materials for the work session topic Staff received updated
emissions projections from one of the Fort Collins businesses affected by a possible Large Emitter
tax. These updates are reflected in the presentation materials.
At the April 25 work session, staff presented the following projections on the large emitter tax:
Attachment: Supplemental Slides for Presentation
As of June 13 and based on updated emissions, revenue projections have been revised as follows:
The appendix display included in the meeting materials was erroneously based on calendar year 2023
rather than 2024, and this has been corrected above and in the attached. A slide has been created
comparing the before vs. after impact of these changes, and staff is able to display this slide for Council if
desired.
Headline Copy Goes Here9Current PackageResident Annual ImpactAnnual Revenue EstimateUseTimingFunding MechanismCategory•Council action only – does not require voter approval • 2% increase. ~ $14/household$1MClimate2023(Active in 2024)Natural Gas BillsFranchise Fee to 3%• Residential increase of $143 on $400K home• Residential increase of $179 on $500K home• Residential increase of $268 on $750K home• Residential increase of $358 on $1M home• Commercial increase of $626 on $432K property$18MParks & Rec w/ Aquatics Capital20235 MillsProperty Tax•$31 per resident/ $78* per household• Sales tax on food would remain at 2.25%• Visitors also impacted$10MClimate Umbrella2023Additional ¼ Cent Dedicated TaxSales Tax•$235 net annual increase per household*$29M+Total*Assumes a household size of 2.5 (American Community Survey 2021 1-year estimates, table DP04)
Headline Copy Goes Here19Large Emitter TaxProjected Year <25K MT AttainedPotential 2024 Revenue ($51/MT)Projected Taxable Emissions (MT CO2e)Total Reported Emissions (MT CO2e)2024 ForecastEntity2026$0.2M3,366 MT28,366 MT Broadcom2031$0.6M11,715 MT36,715 MTAnheuser Busch$0.8M15,081 MT65,081 MTTotalConsiderations:• Requires voter approval• Potential to accelerate de-carbonizing of two entities currently emitting more than the EPA reporting threshold (25k MT CO2e/year)• Revenue estimate uses current “Social Cost of Carbon” ($51/MT CO2e)• Could change at federal level• Diminishing returns – revenue declines as emissions decline• Applies to net emissions above EPA reporting threshold of 25,000
Headline Copy Goes Here20Projected Year <25K MT AttainedPotential 2024 Revenue ($51/MT)Projected Taxable Emissions (MT CO2e)Total Reported Emissions (MT CO2e)2024 ForecastEntity2026$0.2M3,366 MT28,366 MT Broadcom2031$0.6M11,715 MT36,715 MTAnheuser Busch$0.8M15,081 MT65,081 MTTotalProjected Year <25K MT AttainedPotential 2024 Revenue ($51/MT)Projected Taxable Emissions (MT CO2e)Total Reported Emissions (MT CO2e)2024 ForecastEntity2028$1.7M32,400 MT57,400 MT Broadcom2031$0.6M12,474 MT37,474 MTAnheuser Busch$2.3M44,874 MT94,874 MTTotalLarge Emitter Tax Projections over TimeCurrentPrior