Three statewide tax-cutting initiatives facing Colorado voters this November could radically change how state government conducts business and substantially alter its delivery of services to taxpayers.
Dubbed “The Evil 3” by opponents, Amendments 60 and 61, along with Proposition 101, would not only slash state revenues (over $2 billion annually by most estimates) but would also restrict municipalities from offering voters the option to raise taxes should budget shortfalls create a need for fiscal mitigation.
Supporters of the initiatives claim that Colorado already receives enough tax revenue and that the measures would force state government to operate more efficiently. Furthermore, supporters allege there would be no fiscal impact to schools since the state is “required by law to replace 100 percent of school tax revenue impacts.”
However, supporters fail to state just where the money would come from to replace lost revenues. In fact, during the past year, faced with budget shortfalls, the state took back $8.1 million in K-12 funding in the form of rescissions. The Archuleta County School District 50 Joint lost over $200,000 from 2009-2010 funding from state-mandated rescissions.
Opposition to the three measures has been varied and widespread, as both Democratic and Republican candidates for state and federal seats have stated unequivocal opposition to the initiatives (only independent candidate for governor Tom Tancredo has voiced support for the three).
Furthermore, the business community has been galvanized behind a united opposition for the measures including the Colorado Association of Commerce and Industry as well as the Metro Denver and Grand Junction Chambers of Commerce. A common argument is that, with services and infrastructure severely underfunded by the measures and with schools overcrowded and understaffed, existing businesses would be driven from the state, with new businesses unwilling to relocate to Colorado.
According to the nonpartisan Special District Association of Colorado, passing Amendments 60 and 61 and Proposition 101 would lead to 70,000 jobs lost in the state, half from small businesses, the rest from local and state government.
Supporters of the three measures make no claims regarding job losses.
As a service to readers of The SUN, herein we provide a quick explanation for each of the ballot initiatives with official ballot language provided on pages A6 and A7.
This initiative (See page A6) would require school districts to eliminate half of property taxes currently funding those districts by 2020, shifting the burden for school funding to the state’s general fund.
This year, the state slashed education funding by $300 million.
Previous voter-approved TABOR (Taxpayer’s Bill of Rights) overrides would be cancelled and future TABOR overrides would be limited to four years. Any voter-approved property tax increase would only be valid for a period of 10 years, limiting a municipality’s ability to fund large-scale capital improvement projects (such as a wastewater treatment plant) through long-term bond issues.
Finally, the initiative would require enterprise funds (i.e. utilities such as water, sewer or electrical, or recreation programs) to pay property taxes, with those costs being passed on to customers in the form of increased utility bills or program fees.
While savings to property owners would be nominal (on average, about $374 a year), it could create a budget shortfall for the state of over $1.5 billion.
Amendment 61 (see page A6) would severely limit municipal borrowing for large-scale projects by prohibiting almost all debt instruments currently used to finance those projects. Furthermore, it would prevent the state from any borrowing — all projects would have to be funded on a “cash only” basis.
Much like a large purchase by an individual (such as a home or an automobile) requires a loan, with payments spread out over years, municipalities and the state often borrow money to fund expensive, large-scale construction and improvements. Amendment 61 would severely restrict a municipality’s ability to fund large-scale projects, while the state would be prohibited from borrowing for any capital improvements.
Close to home, had something like Amendment 61 been in place during the past few decades, no high school would have been built in Pagosa Springs, no wastewater treatment plant would have been built, most water and sewer upgrades would not have been built and almost all of the county’s road improvements would have been prohibitively expensive.
This initiative (see page A7) would reduce vehicle registration fees to $2 a year on new vehicles, $1 a year in following years. It would also eliminate sales tax on the first $10,000 of a vehicle’s value, as well as sales tax on all telecommunications services. Furthermore, it would cut state income tax by 25 percent — a family with a yearly income of $55,000 would have their taxes reduced by $708 a year.
Finally, Proposition 101 would repeal road and bridge fees ( funding the backlog of road construction and repair projects). The $409,913 awarded by the state to Archuleta county for road repairs and $163,175 awarded for bridge repairs and maintenance would be zeroed out, providing no money for those projects.
It is estimated that Proposition 101 would reduce state revenues by over $1 billion a year.
Closer to home, the Bell Policy Center (an independent research group) estimates the following effects on Archuleta County if the ballot measure passes:
The $1.04 million collected in the county from license fees for the State Highway Users Tax Fund would decrease to $187,910 next year if Proposition 101 passes. On average, each vehicle owner in Archuleta County would save about $45.16 per year in license fees.
If the ownership taxes decreased in Archuleta County (an average of about $75 per year), revenues collected for Pagosa Springs and the county would be reduced from $1.4 million per year to $22,549, should Proposition 101 pass. In 2009, $543,675 was allocated to the school district from those taxes; Proposition 101 would reduce that to $8,591 in 2011 — a reduction in per-pupil funding from $438 per year to $6.92 in 2011. The town, county and special districts would see a similar 98.4 percent reduction in yearly revenue — from a total of $934,665 collected in 2009 to $14,767 in 2011 if Proposition 101 passes.
On Tuesday night, the school district board of directors unanimously passed a resolution opposing “The Evil 3” and urging district voters not to support the measures.
A portion of the resolution read, “The Board of Directors of Archuleta County School District 50 Joint has taken an official position opposing Amendments 60, 61 and Proposition 101, and urges citizens statewide to preserve the Colorado way of life by voting NO on all three-ballot measures.”
To date, no school district in Colorado has voiced support for any of the three measures; every school district in the state that has addressed the measures has stated opposition to the ballot initiatives.
On Thursday, the Pagosa Springs Town Council will address the three initiatives and all indications point to a similar opposition.
“Those measures would be devastating for how we operate; it’s difficult to think of how we’d survive,” said Pagosa Springs Town Manager David Mitchem earlier this week. “They would kill the economy if they pass.”
According to Archuleta County Administrator Greg Schulte, the Archuleta Board of County Commissioners will address the measures at the Oct. 5 meeting. Again, all indications suggest that the BoCC will also state opposition to the measures as, in an interview earlier this week, BoCC chair Clifford Lucero stated clear opposition to the measures.
So far, not a single municipality or county in Colorado have gone on record in support of the measures.
However, with an anti-government, anti-tax and anti-spending mood with voters this year, support for the initiatives appears strong, showing a narrow majority approving the measures in a poll released late last week.
With just under two months before November’s general election, opponents of the measures will need to scramble to educate voters as to why they believe the ballot initiatives would hurt Colorado.