Fueling Economic Growth

Understanding Pueblo’s Half-Cent Sales Tax

Economic Growth Needs Infrastructure 

Many residents of Pueblo may have seen the half-cent sales tax on their receipts and wondered, “Why do we keep voting to renew this?” At first glance, a small extra charge - only 50 cents for every $100 spent - may seem insignificant or even unnecessary. However, this tax plays a vital role in the city’s long-term economic growth. It’s not just another cost on your purchases; it’s an investment in Pueblo’s future.

What the Half-Cent Sales Tax Does

The half-cent sales tax is specifically earmarked for economic development projects. This means the funds do not go into the city’s general operating budget or everyday services. Instead, the money is used to support initiatives that attract new businesses, help existing businesses expand, and create jobs within the community. Essentially, it gives Pueblo the tools to compete for economic growth opportunities and encourage investment that might not otherwise come to the city.

Over the last five years, the half-cent sales tax has supported several projects that have had tangible benefits for the city. For example:

• Fomcore Manufacturing (2021): Pueblo contributed roughly $1.74 million in incentives to help this company invest $10 million in a new facility. The project created 87 jobs with an annual payroll of approximately $3.75 million. Even if some workers already lived in Pueblo, higher wages and new job opportunities increase local spending power and support the community’s overall economy.

• Boreas Campers (2021): With support of about $696,000 in city incentives, this outdoor recreation manufacturer opened a new facility providing 29 jobs. Beyond payroll, the company invested in equipment and infrastructure, creating opportunities for local suppliers and contractors.

• Trussworks Operations (2025): The city offered roughly $1.43 million in incentives to facilitate a $6 million private investment. This expansion created 65 new jobs with competitive wages, contributing to both the city’s tax base and the availability of skilled labor in Pueblo.

These examples show that the half-cent sales tax enables the city to leverage private investment. In economic development terms, this is often measured as a “private-to-public investment ratio,” which compares the amount of private capital a project brings relative to public funding. Even when many workers are already residents, higher wages, business expansions, and increased tax revenues generate tangible benefits for the community.

Why the Half-Cent Tax Continues to Be Renewed

Several factors explain why voters consistently approve this tax every five years:

1. Hope for Job Growth: Citizens naturally want more jobs, higher wages, and reduced unemployment. The half-cent tax is presented as a direct path to attracting new companies and industries.

2. Low Personal Cost: At 50 cents per $100 spent, the tax is relatively minor for individual households. Even a $1,000 monthly spend translates to only $5 in tax - a small price to pay for potential economic growth.

3. Visible Success Stories: The city highlights projects like Fomcore, Boreas, and Trussworks, giving voters concrete examples of how the tax helps attract jobs and private investment.

4. Long-Term Economic Stability: By diversifying the local economy and supporting high-quality industries, Pueblo reduces reliance on a few large employers and strengthens resilience against economic downturns.

5. Political Inertia and Trust: Once the tax is in place, it becomes part of the city’s economic strategy. Well-organized campaigns and positive messaging make renewal appear logical to most voters.

Limitations of the Half-Cent Tax

It’s important to acknowledge the limitations. Critics rightly point out that:

• Many jobs go to existing residents, which means payroll increases may mostly redistribute existing income rather than introduce large amounts of “new money.”

• Some companies primarily serve local customers, which does not bring external revenue into Pueblo.

• Tracking the precise return on investment is difficult; economic development is inherently long-term and complex.

Despite these limitations, the half-cent sales tax remains a cornerstone of Pueblo’s economic development strategy because it consistently produces measurable results over time, including jobs, investment, and infrastructure improvements.

Expanding the Concept: What a 1% Sales Tax Could Do

Imagine if Pueblo had a 1% sales tax dedicated to city services in addition to the half-cent tax for economic development. This would open up a wide range of opportunities to strengthen the city’s core functions and quality of life.

Funding City Services

A 1% sales tax could significantly improve Pueblo’s ability to provide essential services:

• Public Safety and Fire Departments: Additional funding could improve staffing, training, and equipment for police and fire personnel, helping the city respond faster to emergencies and maintain public safety.

• Street Repair and Maintenance: Aging roads, sidewalks, and bridges could be upgraded more quickly, reducing long-term repair costs and improving daily travel for residents.

• Parks, Recreation, and Community Programs: Enhanced funding could maintain parks, support youth programs, and create recreational opportunities that attract families and visitors alike.

• Libraries and Cultural Institutions: Additional resources could help keep libraries, museums, and cultural centers accessible and well-maintained, promoting education and tourism.

• Emergency Services and Public Health: The city could better support hospitals, clinics, and public health initiatives, improving outcomes and resilience during crises.

Addressing Aging Infrastructure

One of the most urgent areas that a 1% sales tax could address is Pueblo’s aging infrastructure. Much of the city’s roads, bridges, water systems, and utility networks were built decades ago and are reaching the end of their expected life cycles. Deferred maintenance will lead to higher repair costs in the future, safety hazards, and decreased economic competitiveness.

Funding from a dedicated 1% tax could allow Pueblo to:

• Replace or repair deteriorating bridges and overpasses

• Upgrade water and sewer systems to prevent failures and improve efficiency

• Improve stormwater management to reduce flooding and property damage

• Modernize traffic systems to improve safety and reduce congestion

• Upgrade public buildings to meet current safety codes and energy standards

By investing proactively, emergency repair costs can be avoided, reduces risks for residents, and ensures infrastructure can support future growth.

Broader Economic and Community Benefits

A 1% sales tax could also enhance Pueblo in ways beyond immediate services:

• Attracting New Businesses: Well-maintained infrastructure and reliable city services make Pueblo more attractive to companies considering relocation or expansion.

• Supporting Local Residents: Improved services, roads, and recreational facilities increase quality of life, which helps retain residents and attract newcomers.

• Boosting Property Values: Infrastructure improvements and vibrant community programs can raise property values, creating long-term wealth for homeowners.

• Encouraging Private Investment: Private investors are more likely to build and expand in a city where basic services, utilities, and infrastructure are reliable.

Essentially, a 1% sales tax could generate a compounding effect, improving daily life, supporting economic development, and stabilizing the community financially.

If the residents of Pueblo aren’t willing to invest in the city,
why should big businesses?

Balancing Economic Growth and City Services

The half-cent sales tax has been effective in helping Pueblo grow economically. However, adding a 1% sales tax for city services complements this approach by addressing urgent infrastructure needs and ensuring the community can maintain the benefits of growth.

In other words, the two taxes would work together:

• Half-cent tax: Attracts and expands businesses, creates jobs, and brings private investment to the city.

• 1% tax: Ensures the city has the resources to maintain roads, bridges, public safety, and essential services - the foundation that supports residents and businesses alike.

By combining economic growth strategies with proactive city service funding, Pueblo could create a self-reinforcing cycle: stronger infrastructure and services attract more investment, which brings more jobs and payroll into the community, further increasing the city’s ability to fund essential services.

In Closing

Pueblo’s half-cent sales tax may seem small to individual shoppers, but its impact is significant. It has helped bring companies like Fomcore, Boreas Campers, and Trussworks to the city, creating jobs, increasing payroll, and supporting private investment. While some benefits are indirect - such as improving the city’s workforce or infrastructure - these projects have measurable long-term effects on the local economy.

Adding a 1% sales tax dedicated to city services and infrastructure could complement the half-cent tax, addressing Pueblo’s aging roads, bridges, water systems, and public safety needs. It could fund essential programs, improve residents’ quality of life, and position the city for sustained growth.

Ultimately, these taxes are investments in Pueblo’s future. The half-cent sales tax fuels economic development, while a 1% sales tax could ensure that city services and infrastructure keep pace with growth. Together, they would give Pueblo the tools it needs to remain competitive, attractive, and resilient for decades to come.