FCSG Statement on the Continued Importance of a Large Emitter Tax

Statement updated on June 22, 2023

The Fort Collins Sustainability Group (FCSG) urges City Council to let the voters decide whether or not to impose a Large Greenhouse Gas (GHG) Emitter Tax on corporate polluters within city limits this November.  Having analyzed the Sustainable Funding Update that Council will discuss on June 13th, we offer the comments that follow.

We are glad to see that Broadcom is now forecasting that its GHG emissions will drop to the EPA reporting threshold of 25,000 metric tons of CO2(e) earlier than forecasted previously.  However, we note that forecasts are not necessarily achieved.  A Large GHG Emitter Tax would – among other things – incentivize Broadcom to carry through on its plans.  This is especially important given the recently-reported deal with Apple that will expand production at Broadcom in coming years.  We wonder whether that expansion of production was factored in to the forecast included in the Sustainable Funding Update.

Due in part to the reduction in forecasted emissions by Broadcom, estimated revenue from a Large GHG Emitter tax in the first year decreased from the $4.8 million estimated by City staff earlier to about $800,000.  This figure is comparable to the amount of money that would be raised by increasing the natural gas franchise fee, which council is also considering to help fund the City’s climate programs.  While revenue from the Large GHG Emitter Tax will likely decline in the following years due to the anticipated reduction in Broadcom’s and Anheuser-Busch’s emissions, the same can be said of the natural gas franchise fee increase, which is likely to decline as natural gas-fired water and space heaters are increasingly replaced by electric heat pumps.

We believe that putting a Large GHG Emitter Tax on the ballot would signal that Council takes equity concerns seriously.  The other revenue sources under consideration for funding the City’s climate programs (the natural gas franchise fee increase, sales tax increase, and excise taxes on marijuana and tobacco) are all regressive, i.e. they fall more heavily on those of lower means than they do on wealthier residents and businesses.  A Large GHG Emitter Tax, on the other hand, would be paid (in the first year at least) by two corporations that together have released more GHGs into the atmosphere in the past ten years than the total amount of community emissions in 2021, the last year for which these data have been reported.*

It has been suggested that imposing a Large GHG Emitter Tax would be punitive.  In fact, it would discourage future GHG pollution in excess of the EPA’s reporting threshold by Broadcom, Anheuser-Busch and any other potential large corporate polluters.  This is protective, not punitive.

Finally, City staff is still projecting an annual funding shortfall for climate programs of at least $9.5 Million.  This highlights the need to look for additional revenue sources.  We think the Utility Occupation tax – or fee – are options that should be explored further.  Like a Large GHG Emitter Tax, a Utility Occupation fee or tax would reduce activity we wish to discourage (the use of natural gas for space and water heating).  The funds raised could be used to further offset the costs of installing heat pumps in residences and businesses to replace natural gas heating appliances.  This would decrease GHG emissions, which is of course an important community goal.  We urge City Council to direct staff to continue researching these and other potential sources of revenue to help close the climate programs funding gap.

*According to data available on the EPA FLIGHT website, combined emissions from Broadcom and Anheuser-Busch from 2012 to 2021 were 2,271,185 metric tons CO2(e).  In 2021, Fort Collins community GHG emissions were 1,766,870 metric tons of CO2(e).

Update: At the work session on June 13th, only two councilmembers (Kelly Ohlson and Julie Pignataro) expressed support for moving forward with the Large Emitter Tax.  Emily Francis was not present.   Since this was less than a majority of council, staff will not develop the Large Emitter Tax as a ballot initiative.  The FCSG is currently exploring other options for bringing this before the voters of Fort Collins.



Author: Kevin Cross

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