Mayor proposes changing half‑cent sales tax criteria to fund placemaking, curb economic leakage

Mayor Graham presented a refresher on proposed amendments to the half‑cent sales tax criteria ordinance at the Feb. 17 work session, framing changes intended to give the city more tools to attract retail and place‑making projects that generate sales tax and reduce 'economic leakage.'

Graham described three additional eligible categories — place‑making, preventing economic leakage and economic catalysts not strictly tied to 'primary jobs' — and proposed a cap (illustrated at 15% of the unencumbered fund balance in a given year) for using the fund for those categories. Using a June 2025 example of about $62 million unencumbered, the mayor said 15% would be roughly $9.4 million available in a year.

Graham said the change would allow the city to pay for infrastructure or strategic land acquisition to attract firms such as national retail or tourism projects that would otherwise draw dollars out of Pueblo. "We would pay for the infrastructure to go in," he said, describing developer agreements that would require repayment over time.

Councilors pressed on oversight and past practice. Councilor Hernandez asked whether the city changed how it disburses funds; Graham said the administration would move toward reimbursements for verified job creation and stronger contract oversight (rather than lump‑sum upfront payouts) and noted that the city has hired an accountant to enforce contract compliance. Councilor Gomez raised concerns about the mayor’s role and about replacing external partners (PEDCO); Graham said Advanced Pueblo is an internal initiative to coordinate incentives among city departments and not necessarily to permanently supplant external entities.

Councilors said they supported the goal of attracting development but sought guardrails — metrics, collateral and enforcement — to prevent repeat situations in which incentive recipients failed to meet job or payroll commitments. The ordinance was scheduled for first reading on Feb. 23.

No final vote was taken at the Feb. 17 work session; staff and council will refine the ordinance language and oversight mechanisms before the first reading.