The Denver City Council on Monday approved a sales tax hike, sending the measure to the November ballot for Denver voters to decide.

If approved by voters, the 0.34 point tax rate increase would make the Denver one of the highest-taxed municipalities in the state — higher even than Boulder’s, with only the ski and mountain towns surpassing it.

The councilmembers also discussed a proposition to give certain city employees collective bargaining rights.

The tax rate increase will require Mayor Mike Johnston’s signature before being added to the November ballot; the collective bargaining measure will not.

The tax measure began working its way through committee weeks ago and appeared before the full council for the first time last week.

The anticipated revenue will provide up to $70 million to fund Denver Health, which serves as the city’s safety net system. In addition to operating a hospital with a Level 1 trauma center — the highest level of surgical care for trauma patients — the health system also operates Denver’s corps of paramedics and the Rocky Mountain Poison and Drug Safety Center, among others.

Though a small amount compared to the system’s $1.4 billion budget, councilmembers previously said it would inject enough funds to maintain some of Denver Health’s services.

Councilmember Kevin Flynn, who has been a vocal opponent of the measure since it was introduced, worries that Denver taxpayers would become overburdened by the tax rate increase, especially when combined with an additional pair of increases that could raise the total tax rate in Denver to 9.61%.

That would make Denver the highest-taxed city with a population of more than 100,000 in the Front Range.

Using a sales tax to bring in money is something of a risk, since it is dependent on so many market factors, Denver Health CEO Dr. Donna Lynne said.

But the risk is worth it because of how wide Denver Health’s reach, she said, extending beyond the borders of the City and County of Denver.

The hospital system, which doesn’t ask for insurance, takes care of any patient who comes through its doors, arrives in the emergency room or is transported from other area hospitals that may not have similar resources.

Ahead of the November election, Lynne implored voters to consider that Denver Health offers so much more than just medical services.

“(We have) 19 school-based clinics and provide care that keeps our young people in school, graduating, and hopefully coming out to be productive members of society,” Lynne said. “Many students come with complex, and sometimes chronic conditions that keep them from learning. So, that’s probably a program that I am so immensely proud of.”

There are strings attached to the money generated by the sales tax increase, Lynne noted.

The hospital can’t buy new desks or computers, for example. Denver Health can only fund four areas with this new source of income: Emergency and trauma care, mental health care, primary care and pediatric care, according to the proposed ballot language.

Currently, the hospital has 78 psychiatric and mental health and substance abuse beds but operates only 50 of them, Lynne said. Money generated by the sales tax will help Denver Health open the remaining 28 beds permanently, she said.

Flynn earlier expressed concerns about revenue projections falling short.

“Our sales tax revenues are already falling short of our projections and that has me concerned for our general fund,” he said at a committee meeting earlier in June. “It might be time to look at putting a ceiling on our sales tax rates.”

Flynn called the hospital system a “needed resource” in previous meetings. His concern, he said, lies in finding a sustainable way to fund a system that hasn’t broken even in years. He previously suggested a regional approach to funding it.

That $70 million the new tax is anticipated to generate is the same amount that the city has so far spent on the illegal immigration crisis.

Earlier, Denver Health pointed to “uncompensated care” as one of the fiscal strains on the system.  Specifically, the hospital system said it saw $10 million in additional “uncompensated care” in the last year, which it largely attributed to the tens of thousands of medical visits from immigrant patients from South and Central America. The rise in costs coincides with — and health officials attribute to — the unprecedented number of immigrants, who have crossed America’s border illegally and arrived in Denver.

The council also discussed referring another measure to Denver voters to grant some city employees the right to collective bargaining when discussing pay and benefits.

Those employees include library workers and those at Denver Water, among others.

The measure drew wide support from the council, while Flynn also opposed the proposal.

“I support putting collective bargaining for city workers on the ballot but the draft before us has a poison pill I cannot accept,” he said. “It leads directly to all 50-plus aides who work for the 13 council members being included into a single bargaining unit.”

“My aides don’t work for any other member, and no other member’s aides report to me. So, I can’t vote for this measure when it allows other members’ aides to bargain over the wages and working conditions in my office,” he said. 

Nine councilmembers sponsored the proposal, which likely means it would ultimately pass. 

Councilmember Amanda Sawyer, who supports the proposal, said the council itself is not deciding the issue but sending it to the voters, who will decide whether employees should have the right to collectively bargain. She said the city experienced tremendous loss during the “Great Resignation” that followed the COVID-19 pandemic, and that the exodus of workers resulted in a substantial loss of institutional knowledge.