FAQs

If passed, there would be no tax on food for home consumption, incontinence products and diapers, and period products. This means that there would be no tax on traditional groceries that are intended to be prepared and eaten at home. There would still be a tax on prepared foods sold at grocery stores, such as items from salad bars, pre-made items in delis (such as sandwiches), and food sold in vending machines. 

— Added March 25, 2024

Groceries have been taxed since 1981 when Parker citizens voted to institute a 1% sales tax to provide municipal services. The citizens specifically did not exempt groceries from the sales tax at this time or at any other time when they voted to increase the sales tax to the current rate of 3%.

The tax on groceries constitutes an important source of revenue for the Town. The majority of revenue used to pay for Town services comes from sales tax. Services funded by sales tax include public safety, road maintenance, snow removal, parks maintenance, municipal court, and more. For every dollar generated in sales tax, 83 cents go to pay for these services. The remaining 17 cents of each dollar is required by the Town Charter to be used for parks and recreation amenities. In 2023, sales tax for Town services totaled $55.8 million while parks and recreation totaled $11.2 million.

— Added March 25, 2024 

Approximately $13.2 million was collected from the tax on groceries in 2023 ($1.1 million monthly), which makes up 19.7% of the sales tax revenue used to provide services to Town residents.

— Added March 25, 2024

If the grocery tax were to be eliminated, this would reduce funding for the following: 

• Law enforcement services, including police personnel, facility, vehicles, dispatch center, and evidence storage; 
• Town-hosted events, such as Fall Fest and the Fourth of July Celebration, and support of other community events like Parker Days;
• The maintenance and operation of roads, including the personnel and equipment needed for snow plowing operations, fixing roads, and traffic operations; 
• The purchase, improvement, and operation of parks, recreation, and open space, including construction of improvements such as ballfields and trails, recreational facilities like the Recreation Center and Fieldhouse, and personnel to operate and maintain the facilities and programming, such as camps, classes, and sports leagues; 
• Support for Parker Arts amenities including operation of the PACE Center, Schoolhouse, and Ruth Chapel event venues including the events, camps, and classes offered in those venues; 
• Municipal court personnel and facilities, including the Judge; 
• Legal support to prosecute violations of the Town’s criminal and civil codes; and
• The administrative personnel, facilities, and equipment needed to manage the Town.

— Added March 25, 2024

The total budget for 2023 was $185 million across all funds. State law requires us to pass a balanced budget each year (revenues must match expenditures). We cannot spend into a deficit as can the federal government.

General Fund expenditures in 2023 were $66.3 million. This fund is the Town’s main operating fund. Operations accounted for in this fund include Police/Public Safety, Public Works, Parks Trails and Forestry, Building Inspection, Community Development, Municipal Court, and Administration. The General Fund also subsidizes a portion of Parks, Forestry, and Open Space.

The rest of the Town’s funds beside the General Fund can only be used for narrow, specific purposes. Revenue generated by these funds typically cannot be used for general purposes. For example, excise tax revenue (taxes levied on new development) must be used for building roads, parks, and facilities. Those revenues cannot be used to cover key operations costs like police, regular maintenance activities, or administrative functions.

You can learn more about the budget by visiting the Town website at www.parkerco.gov/budget. 

— Added March 25, 2024

The process for getting an initiative on the ballot is specified in the Town’s Home Rule Charter. First, five registered voters of Parker must form a Petitioner’s Committee and provide both an affidavit and a petition to the Clerk that sets out the proposed initiative in full. Once the Clerk approves the affidavit and petition, the Petitioner’s Committee has 180 days to gather the signatures of 15% of the Town’s registered voters. This number is calculated based on the total number of registered voters 30 days before the first signature on the petition. 

If the Petitioner’s Committee successfully gathers the required number of signatures, the Clerk will verify each signature on the petition. If the Clerk determines that the petition is sufficient (has the required number of signatures), Town Council has two options. The first option is to adopt the proposal from the petition into law. The second option is to hold an election where the initiative is placed on the ballot and Parker voters can decide if they want to approve it. If Town Council chooses option 2, the election must be held between 30 and 90 days after final action by the Town Council as provided by the Town’s Home Rule Charter. 

— Added March 25, 2024

We plan for large capital and major maintenance expenditures as part of the 10-year capital improvement plan (CIP). Major projects can require multiple years to plan, design, fund, and construct or execute. These projects are generally funded from construction use tax, developer contributions, intergovernmental agreements, grants, and excise tax.

— Added March 25, 2024

Municipalities fund day-to-day operations primarily through taxes and fees. In Colorado, most towns and cities are funded through sales and property taxes. The total sales tax in Parker is 8%; however, the amount of sales tax collected by the Town of Parker is only 3%. Other sales taxes include State 2.9%, RTD/SCFD 1.1% and County 1%. For example, a purchase of $100 in Parker would result in $3 being collected by the Town for sales tax. 

Property tax rates are expressed in mills, which are equal to $1 for every $1,000 of property value. The Town of Parker property tax mill levy is 2.602. A house that is appraised by the assessor’s office with an actual value of $600,000 pays $104.60 in Town of Parker property tax. Below is a table to illustrate this calculation: 

• Total Actual Value: $ 600,000.00; Taxable Actual Value is what property was appraised for by Douglas County Assessor
• Taxable Assessed Value: $ 40,200.00; Taxable Assessed Value is the Taxable Actual Value multiplied by the Residential Assessment Rate of 6.7% (per SB23B-001)
• Milly Levy: 2.602; Mill Levy
• Tax Rate: 0.002602; Tax Rate is the Mill Levy divided by 1,000
• Town of Parker Property Tax: $ 104.60; Town of Parker Property Tax

— Added March 25, 2024

Sales tax collected is used to fund Police/Public Safety, Public Works, Parks Trails and Forestry, Building Inspection, Community Development, Municipal Court, and Administration. This includes:

• Law enforcement services, including police personnel, facility, vehicles, dispatch center, and evidence storage; 
• Town-hosted events, such as Fall Fest and the Fourth of July Celebration, and support of other community events like Parker Days;
• Municipal court personnel and facilities, including the Municipal Judge; 
• Legal support to prosecute violations of the Town’s criminal and civil codes; 
• The maintenance and operation of roads, including the personnel and equipment needed for snow plowing operations, fixing roads, managing stormwater, and managing traffic; 
• The purchase, improvement, and operation of parks, recreation, and open space, including construction of improvements such as ballfields and trails, recreational facilities like the Recreation Center and Fieldhouse, and personnel to operate and maintain the facilities and programming, such as camps, classes, and sports leagues; 
• Support for Parker Arts amenities including operation of the PACE Center, Schoolhouse, and Ruth Chapel event venues including the events, camps, and classes offered in those venues; and
• The administrative personnel, facilities, and equipment needed to manage the Town.

This does not include water and sewer, schools or social services like public health. These are paid for by the water district, school district and county respectively. 

— Added March 25, 2024

Town services that are referenced in this FAQ are mostly paid out of the General Fund. The 2024 budgeted revenue in this fund is $80.9 million. In the 2024 budget, sales tax makes up 74.5% and property tax 3.7% of the total General Fund revenue.  Other revenue sources in the General Fund are intergovernmental (5.5%), license and permit fees (5.5%), charges for services (4.6%), other taxes (4.6%), fines and forfeitures (0.1%), and miscellaneous (1.3%).

The combination of the General Fund with all other funds makes up the full budget for the Town. Included in those funds are separate funds for debt service, stormwater operations, construction of parks, trails, stormwater infrastructure, and major roads. The Town’s budgeted revenue for all funds in 2024 is $176.2 million. Sales tax accounts for 44.1% of total Town-wide revenue and property tax accounts for 1.7%. Other revenue sources that fund Town operations include charges for services (19.5%), intergovernmental (13.2%), other taxes (7.2%), license and permit fees (2.6%), fines and forfeitures (0.1%) and developer contributions and other miscellaneous revenue (11.6%).

There are a number of goods and services that the Town does not tax. A list of these items can be found in the Parker Municipal Code, Section 4.03.200.

— Added March 25, 2024

Some funds have restrictions on what they can be used for, which restricts our ability to use money set aside for big projects to make up a shortfall. We organize the budget into several fund categories. Each one functions like a separate bank account with different revenue sources and expenditures. The General Fund is the main operating fund and is the most flexible, allowing us to apply revenue to other expenditures when necessary. This fund relies heavily on sales tax revenue. The other funds’ revenues are not as flexible because they have restrictions on their uses. For example, stormwater fees collected from residential and commercial development properties are received in the Stormwater Utility Fund. Those revenues cannot be used for anything besides maintaining planning, constructing and maintaining the Town’s stormwater system. Using funds for budgeting different kinds of revenue promotes transparency and accountability in how the Town spends dollars entrusted to it.

— Added March 25, 2024

We are committed to managing tax dollars wisely. Each year the budget comes about through a collaboration between the Mayor and Council, the Parker community and Town staff. The result is a transparent and balanced budget that advances the community’s priorities and further improves the quality of life for residents. We continue to maintain healthy fund balances and cash fund capital projects rather than incurring new debt. 

We also continue to strengthen the services provided to residents while demonstrating disciplined fiscal stewardship. An example of this stewardship is the early payoff of nearly $12.5 million in bonds issued in 2014 for construction of the Public Works Operations Center and Parker Recreation Center renovation. The payoff was made in 2024, 10 years early, the result was $3.2 million in savings to taxpayers. We were able to do this as a result of unusually high sales tax revenue growth of 18.4% and 11.1% in 2021 and 2022, respectively. These unusually large year-over-year increases coincided with the COVID-19 pandemic that saw residents shopping closer to home. Historically, the Town’s average annual sales tax revenue growth is closer to 5%. Since 2022, the Town’s sales tax revenue has returned to more historic (normal) levels of 3.7% in 2023.

The Town’s financial statements are annually reviewed by a third-party auditor to ensure that all financials are accurate and compliant with regulations. 

You can review the budget by visiting the Town website at www.parkerco.gov/budget. You can review the financial statements by visiting the Town website at www.parkerco.gov/accounting.

— Added March 25, 2024

While property taxes did increase significantly in 2023, the Town itself did not realize a significant increase in revenue as property tax. Property tax only accounts for 1.7% of revenue across all funds, as we have a minimal property tax mill levy of only 2.602 mills. Of the 50 largest municipalities in Colorado, Parker has one of the lowest mill levy rates. For an explanation of how much of your property taxes go to the Town, please see the "What are all the taxes I pay and how much are they?" FAQ. 

We strive to maintain current services with existing revenue. However, if the initiative to remove sales tax from groceries passes, there will be a significant reduction in revenue. That reduction will result in the Town either having to increase other charges to residents –such as increased fees--or a significant reduction in services provided.

— Added March 25, 2024

According to the State, there are approximately 273 municipalities in Colorado, of which 102 municipalities are home rule and 171 are statutory towns/cities. Home rule means that the city/town has adopted a home rule charter and has more control over local affairs, such as what they can tax and what laws they can pass. Statutory cities/towns can only do those things that the State of Colorado allows them to do, as provided in state law. Parker is a home rule municipality.

The percentage of municipalities that collect a tax on groceries is 64%, a total of 174 in all. However, 75% (a total of 76) of home rule municipalities, like the Town of Parker, collect a tax on groceries and 57% (98 in total) of statutory cities/towns collect a tax on groceries. Sales tax information for Colorado municipalities can be found at https://parkerco.gov/DocumentCenter/View/28838/CO-Municipal-Sales-and-Property-Tax-Rates.  

Most municipalities that do not have a tax on groceries are likely to have other taxes that are higher than Parker’s or will tax items Parker does not tax. For example, the City of Aurora, which does not have a tax on groceries, has a sales tax of 3.53% a separate tax of 8.75% on the sale of marijuana, an occupational privilege tax, admissions tax, and a property tax mill levy of 8.407 mills. In comparison, the Town of Parker has a 3% sales tax (of which only 2.5% is available for Town Services), does not tax marijuana sales (which is prohibited in Parker), and has a property tax mill levy of only 2.602 mills. Of the 50 largest municipalities in Colorado, Parker has one of the lowest mill levy rates. Property tax information for Colorado municipalities can be found at https://parkerco.gov/DocumentCenter/View/28838/CO-Municipal-Sales-and-Property-Tax-Rates.  

Below is a comparison of the major types of taxes collected by Parker versus nearby cities and towns.

* Denver's property tax rates fund both municipal and county services.

— Added March 25, 2024

It can be difficult to make an apples-to-apples comparison between cities and towns since each municipality is unique. Differences may include factors such as population, property value, whether people generally commute out of the area for work or stay locally, tax rates (sales, property, use, etc.), services provided (fire department, water, other utilities), and tax-generating properties like malls and outlets shops, restaurants, etc.

— Added March 25, 2024

While Parker may seem to have a lot in common with its neighbors, we are a unique bedroom community in which many of its citizens commute outside of the Town’s boundaries for work, and therefore often spend their money in other areas for things like lunch, gas, and entertainment. Additionally, we do not have any major retail centers, such as Park Meadows Mall or the Outlet Shops at Castle Rock, which can generate significant revenue for the cities in which they are located. 

Instead, we rely upon routine purchases, such as groceries, to generate revenue. The majority of retailers that sell groceries are located close to the Town’s boundaries, which attracts people from surrounding areas to shop in Parker. Additionally, other jurisdictions may use a variety of mechanisms to raise revenue, such as implementing fees or special taxes, which may not appear in their official sales tax rates. Finally, Parker’s population is still growing and is anticipated to reach nearly 80,000 once it is completely built out. The Town uses its revenues to ensure its infrastructure can accommodate both current and future residents.

— Added March 25, 2024

Other communities have been impacted by budget shortfalls as a result of the tax on groceries being removed or other revenue related issues. For example, the City of Lone Tree recently faced a $12 million deficit and was forced to either reduce expenses or increase revenue. Voters approved a sales tax increase to 2.5%. Without the increase, Lone Tree would have had to cut services and postpone or cancel capital projects.

Another community currently facing a budget shortfall is the City of Loveland. Loveland is a city slightly larger than Parker with a population of about 78,000, compared to Parker’s 67,000. Loveland’s tax on groceries was repealed in a vote in 2023 and was effective starting in 2024. Loveland city staff estimates the reduction in sales tax to be $13.2 million. The city is now considering major budget cuts including reducing first responder training and resources, parks, playgrounds, pickle ball/tennis courts, community events, arts and culture, library programs and services, funding for homeless response and affordable housing, road/sidewalk projects, economic development, development services, staffing levels, etc.

The following link is an article about Loveland’s projections: Loveland food tax shortfall projected to top $13 million (msn.com)

— Added March 25, 2024

The estimated loss of sales tax from groceries collected annually is $13 million, of which approximately 50% is paid by residents (23,000 households in the Town of Parker) for a total of $6.5 million. For an average family of 3 in Parker that spends about $800 per month on groceries, repealing the grocery tax would save them about $24 per month, or $8 per person. However, this will impact citizens in other ways like reduced service levels and increased wait/response times and fees/charges for Town services. 

— Added April 17, 2024

— Added April 17, 2024

Typically, the Town adopts a supplemental budget at the beginning of the year to account for projects that were delayed or continued into the new year (this is also referred to as a carryover or carryforward). On March 11, Town Council approved the 2024 supplemental budget that included a $77 million increase that was related to carryover funds for several major projects (primarily in the Town’s Public Improvement Fund). You can see the 2024 adopted budget and 2024 amended budget below, as well as the major projects (those over $2.5 million) that were carried forward into 2024.  

— Added April 17, 2024

Current revenue is sufficient to cover the Town’s operations. If the initiative were to pass however, there would be a significant reduction in sales tax collected that funds these services. Additionally, some revenue comes from development in the Town, but as Parker nears buildout and there isn’t ongoing development, that revenue source will cease to exist in the near future. However, the service levels needed for the community will remain, and the Town will need to find a way to fund them. Reducing revenue by removing the grocery tax would further exacerbate that issue. 

 — Added April 17, 2024

Public safety for the Parker Police Department encompasses various initiatives aimed at protecting and serving our community. This includes proactive policing strategies, community engagement programs and strategies, emergency response services, traffic enforcement, crime prevention efforts and collaboration with other agencies to ensure the well-being and security of residents and visitors alike. It involves a commitment to enforcing laws, maintaining order, and fostering a safe environment where individuals can live, work and thrive without fear of harm or victimization. 

Operations Include: 

• Patrol (Calls for Service) 
• Police Vehicles 
• Traffic Enforcement and Investigations 
• Investigative Services 
• Dispatch (911 Communications Center) 
• Crime Scene Investigations 
• Records 
• Equipment Technology 
• Recruitment and Retention of Officers and Support Staff 
• Competitive Pay and Benefits to Maintain High Standards 
• Ongoing Certification and Training Costs 
• Animal Control 
• SROs (School Resource Officers) 

— Added April 17, 2024

The average cost of a home in Parker is approximately $650,000, and the Town’s current mill levy is 2.602 mills. In order to make up for the lost revenue from repealing the grocery tax, if the Town relied on increasing the property tax rate (the mill levy), it would need to increase the mill levy to 12.343. This would increase the annual property taxes on an average home in Parker from $113 to $537 each year.  

It should be noted that the Town cannot raise taxes without voters approving a tax increase through an election.  

— Added April 17, 2024

The Town has incentive programs to help attract businesses to the Town. These are the Shopping Center Assistance Program (SAP) and the Tax and Fee Assistance Program (TAP). These programs work by sharing a portion of the sales tax revenue generated by the new business with that business in order to help them pay for improvements required by the Town, such as curbs, gutters, sidewalks, stormwater improvements or in exchange for providing a benefit to the Town, such as increased employment.  

— Added April 17, 2024

If a business decides to not come to the Town because it no longer can take advantage of an incentive program like the TAP or SAP, this could have many negative impacts. For example, the SAP and TAP are important tools for the Town to attract grocery stores to underserved areas. If the Town cannot attract grocery stores to areas that do not have them nearby, this can result in residents having longer trips to get basic necessities and existing stores becoming overcrowded, resulting in longer wait times to check out and not being able to keep items on shelves. 

Additionally, large retailers like grocers often serve as an “anchor” for new commercial developments. These retailers can help attract other businesses for the commercial area, which can be enjoyed by residents. This means that small businesses may not have an opportunity to set up shop in the Town that they otherwise would have if a large retailer were present.  

— Added April 17, 2024

Typically, the proposed budget for the following year is released in the early fall of the proceeding year. The Town is legally required to post the proposed budget by Oct. 15 of each year. While the Town will release the proposed budget by that date, the exact date of release of the 2025 Proposed Budget is not yet known.  

— Added April 17, 2024

In 2023, e-commerce sales in Parker were $5.0 million. E-commerce sales are included in the various merchant categories that the Town tracks. In other words, the Town does not track all e-commerce sales as a single category. For example, a pair of shoes purchased from Amazon is tracked by the Town as part of its “general merchandise” category rather than as an e-commerce sale.  

— Added April 17, 2024

The Town would consider all available tools to address the 14% budget shortfall caused by the elimination of the grocery tax. The most likely result will be that the Town is forced to significantly reduce the services it provides. Other options could include increasing fees for programs and services, such as memberships to the Parker Recreation Center and Fieldhouse, children’s camps and classes. However, an increase in fees alone would not be sufficient to cover the budget shortfall. Finally, the Town could propose an increase to its sales tax or mill levy, which would need to be approved by the voters through an election. If the Town were to propose an increase to its sales tax, the sales tax would need to increase from 3% to 3.7% to cover the shortfall. If the Town were to propose an increase to the property tax, which would only affect property owners living in Parker, the mill levy would need to increase from 2.602 mills to 12.343 mills.  

— Added April 17, 2024