Voters will decide whether to support Denver Health through increase in city’s sales tax

Denver voters will be asked in November to consider increasing the city’s sales tax to raise $70 million a year to help stabilize Denver Health, the region’s financially ailing safety-net hospital.

The Denver City Council voted 12-1 without discussion Monday to send the .34% sales-tax increase — which would add 34 cents to a $100 purchase — to the ballot. The city’s current sales tax is 8.81% and, if this measure is approved by voters, it will increase to 9.15%.

Councilman Kevin Flynn, who represents District 2, cast the only dissenting vote. He previously had expressed concern about “burdening Denver taxpayers” with tax increases.

Mayor Mike Johnston is considering asking the council to place a second sales-tax increase — one that would raise money for affordable housing — on the November ballot, administration officials told The Denver Post earlier this month.

If voters OK the Denver Health tax increase, the health system could only use the money to expand or maintain medical care in the following categories:

• Emergency and trauma care
• Primary care
• Mental health care
• Addiction treatment and recovery services
• Pediatric care

There would be a cap on the administrative costs that could be drawn from the fund, as well.

Denver Health has struggled financially since 2021 as the cost of uncompensated care rose faster than revenues, with state officials warning earlier this year that, without changes to its business operations, the hospital was at risk of deteriorating into a “death spiral.”

The system lost about $35 million in 2022, CEO Donna Lynne told a council subcommittee at a meeting earlier this month. The hospital earned a $17 million profit in 2023, though that wasn’t enough to tackle the maintenance that it deferred in recent years, officials said.