Town, county discuss tax issue for November ballot

Balmy summer days and monsoon rains might make November seem distant, but for county commissioners and town council members, when looking forward to this fall’s ballot, there’s no time like the present.

At a joint work session held in council chambers last Thursday, the commissioners and town council members considered two tax initiatives for the November 2008 ballot, moving on one initiative, and holding off on the other until at least next year (if at all).

The first initiative was not a consideration of a new tax but of reauthorizing an existing countywide sales tax increase originally approved by voters in 1994 and extended in 2001. With the imminent Dec. 31, 2009, expiration of the shared 2 percent sales tax, voters will have to decide whether or not to reauthorize that tax. Should voters approve the reauthorization, the 2-percent sales tax would simply continue as it stands (including the 50/50 split shared between town and county) until 2016, at which time another reauthorization would be necessary.

Since the initiative is a reauthorization of an already existing tax, and not a tax hike (nor would it establish any new tax), the ballot initiative would be immune to requirements in the Taxpayers Bill of Rights (TABOR).

Pagosa Springs would probably survive a reauthorization rejection relatively unscathed. Section 16.3.8 of the Home Rule Charter allows for the continued collection of a sales tax in the event of the termination of a previously instituted tax, irrespective of TABOR restrictions. The county would not fare as well. Without similar protections afforded by home rule, the county would face a certain impediment to its revenue stream and its ability to provide services to its residents. The county’s share of the 2 percent tax goes to its Road Capital Improvement Fund.

Considering a Sept. 5 deadline for the inclusion of all November ballot items, the exigent circumstances regarding reauthorization did not escape representatives from either the town or the county.

“There’s no question that we want to renew it,” said town council member Darrel Cotton, “the question is the time frame.”

County commissioner Bob Moomaw agreed, “It would be irresponsible if we don’t renew this.”

Both boards were in nearly complete accord with the idea that not only should the reauthorization proposal go forward in November, but that educating town and county residents regarding the existing sales tax and its reauthorization would be just as important.

With just over a month to qualify the reauthorization initiative for the November ballot, and just over three months to educate voters as to the merits of the initiative, both town and county officials agreed there is no time to waste and pledged to work together towards a common goal much in the same way they have cooperated in sharing the tax revenue.

The second tax initiative, although no less well-received by town and county board members, did not fare as well and will not likely go before the voters until at least the fall of 2009.

Suggested by Terry Smith (of Terry’s Ace Hardware) at the economic forum in mid-July, the “material use tax” would levy a tax on construction materials purchased outside Archuleta County, with the intention of supporting local construction materials vendors.

Members from both boards agreed on multiple merits of the tax. As a punitive measure, it would help provide a level playing field for local businesses forced to compete with out of county businesses able to sell construction materials at a lower cost. As a revenue gathering measure, it would increase tax revenues by either levying a tax on materials purchased outside the county or through increased sales tax revenues due to more money being spent within the county. Both boards saw the initiative standing a good chance of being approved by the voters.

According to Cotton, “Everyone will vote for a tax that they don’t have to pay.”

Although there was unanimous agreement regarding the merits of the tax, there was no agreement on what that tax would entail: How would it be assessed? What would define “construction materials”? Who would deal with the mountain of paperwork such a tax would no doubt necessitate? Once collected, how would that revenue be earmarked or spent?

Members of both boards agreed that, even if all the details were hammered out on a materials use tax, the issue could potentially throw a monkey wrench into the process of passing the reauthorization of the combined county and town sales tax extension.

With the two tax issues summarily dispatched in their own ways, the boards looked at the issue of the town paving Brookhill Road (although it is a county road). Like the second tax initiative, it was an issue deemed by both boards to warrant more study and was thus tabled for later discussion.

Town council will meet at 5 p.m. Tuesday, Aug. 5, at Town Hall and will consider finalization of its intention to put the sales tax reauthorization on the November ballot. The board of county commissioners will meet Tuesday, Aug. 19 at 1:30 p.m. in the county commissioners’ meeting room and deal with the same issue.