Analysis shows tax measures’ effects on Steamboat, schools
By Jack Weinstein
Steamboat Springs – The panel at Tuesday's Rotary Club of Steamboat Springs weekly luncheon didn't relay good news.
Routt County Manager Tom Sullivan, Steamboat Springs City Manager Jon Roberts, Steamboat Springs School District Superintendent Shalee Cunningham and South Routt School District Superintendent Scott Mader all said their entities would lose revenue if three ballot measures voters will consider in November were approved.
Proposition 101 and Amendments 60 and 61 are intended to reduce fees and taxes, decrease property taxes and limit governments' ability to borrow.
"This language is sexy, and we're very worried about it," Cunningham said about the ballot language that proposes to reduce taxes and fees for people during an economic recession. "It would mean many, many people would lose jobs, and class sizes would certainly increase. That's the reality."
Cunningham said with full implementation of the ballot measures, which would take 10 years, the district's general fund would shrink 45 percent. That's about $9.5 million annually.
According to an analysis of the ballot measures' impact on school funding, called "Looking Forward," South Routt would lose 43.6 percent, or nearly $1.9 million of its annual revenue. The analysis, conducted by the Colorado Fiscal Policy Institute, The Bell Policy Center and the Colorado Children's Campaign, indicated that Hayden School District would lose 53.8 percent, or nearly $1.5 million annually.
The analysis assumes full implementation in 2009.
Mark Neuman-Lee, a Colorado Fiscal Policy Institute policy analyst, who helped create the analysis on the "Looking Forward" website, said 2008-09 numbers were used because they constituted the most current information.
He said it projects lost revenue from specific ownership taxes if Proposition 101 were approved and loss of voter-approved property tax increases above TABOR limits and the reduced property taxes if Amendment 60 passes.
Passage of Amendment 60 would require that the state backfill the lost property tax revenue to school districts, which would be cut in half by 2020.
"We didn't take that into consideration because to forecast what the state would do is virtually impossible," Neuman-Lee said. "The state doesn't have enough money to backfill for the lost local revenue."
In an e-mail last week, supporters of the ballot measures from Colorado Tax Reforms expressed a few issues with the analysis.
The e-mail, which was a response to a request for comment but did not include an author's name, stated that school districts wouldn't lose the property tax portions of that revenue from passage of Amendment 60 because it has to be replaced with state aid. It also states that Colorado can afford to backfill school district revenue lost through property taxes.
"The claim the state can't afford replacement assumes state revenue is not only frozen, but declines. Look at the 26-year history of 476 percent growth!" the e-mail stated, citing Colorado's $19.6 billion in spending this year, which has grown since 1984.
The e-mail also said the plan to phase in the measures throughout time couldn't be ignored. Because the analysis assumes full implementation in 2009, the e-mail stated, "their numbers are false and dishonest."
Neuman-Lee said even though full implementation wouldn't occur for 10 years, the districts still would lose half their property tax revenue with passage of Amendment 60. He said it would have the same impact on the budget 10 years from now as in 2009 because it's the same percentage of lost revenue districts use to fund education.
Mader said the biggest concern for South Routt was the elimination of the state's interest-free loan program likely to occur if voters approve Amendment 61, which prohibits state borrowing and limits local government borrowing to 10 years with voter approval.
He said South Routt relies on the loan program to pay bills and teacher salaries until property taxes are remitted in spring, when the school year nearly is complete.
Mader told the Rotary Club group that the district did get some relief through a $665,000 loan recently approved by the Colorado General Assembly's Joint Budget Committee. He said it would help the district pay bills until November. If Amendment 61 is approved, the district will look for alternatives, Mader said.
In addition to the school districts, county and city revenue also would take a hit if the measures were approved.
Sullivan said full implementation of the measures would cost the county $4.8 million annually. Because the revenue is from specific ownership taxes and voter-approved property tax increases above TABOR limits, it wouldn't be replaced.
Sullivan and Roberts said authorities and enterprises, such as utilities providers, would have to pay property taxes.
Roberts said Proposition 101 would cost Steamboat about $950,000 annually, or 4.5 percent of the city's general fund, a number that pales in comparison to cuts the city already has made. He told the group last week that he would present the City Council with a budget Tuesday that is 30 percent less than the city's peak in 2008.
Roberts said a couple of elements of the ballot measures bothered him. He said state voters, in essence, would be able to decide to repeal local voter-approved property tax revenue over TABOR limits, which he called contrary to government.
And Roberts said, "If the intent is to reduce government spending, I think the legislation ought to focus on spending and not the revenue side."
Because the Rotary Club couldn't find anyone to support the measures, member Sandy Evans Hall, who moderated the panel, read arguments for the measures from the Colorado Legislative Council's Blue Book, which aims to provide a fair and impartial evaluation of ballot measures.
Toward the end of the Rotary Club luncheon, Cunningham said some of the ballot measures didn't fare well in a recent poll. According to the poll conducted by Ciruli Associates of Denver, 51 percent of people surveyed said they would support Proposition 101, 32 percent said they would vote for Amendment 60 and 36 percent indicated support for Amendment 61.