Ballot issues worry local governments; Might cause another recession
By Dan Barker
The Fort Morgan Times
Even some very fiscally conservative people are worried about how Amendment 60, Amendment 61 and Initiative 101 would hurt Colorado.
These ballot issues propose to cut taxes and fees across the state, but could also launch a new recession which could devastate the state's economy, some said at the Progressive 15 standing committees meeting at the Country Steak-Out on Thursday.
If approved by voters in November, the various ballot issues would likely mean cutting 70,000 jobs in a single month when they went into effect in January, said Cathy Shull of Fort Morgan, executive director of Progressive 15, a coalition of Eastern Colorado counties and cities which lobbies for issues that affect the region.
That would in essence cause a taxpayer-induced recession, she said.
Those would not just be government jobs but would include jobs lost that depend on government contracts, such as those which go to building contractors, Shull said.
Shull was reporting estimates and perspectives put together by Coloradans for Responsible Reform, Colorado Strategies and Bell Policy, which she learned at a workshop on the issues, she said.
Estimates of the impact of the issues taken as a whole was a loss of $343 million in transportation funding, a loss of $100 million in sales taxes (including to local government) and $22 million from eliminating sales tax on rental vehicles, Shull said.
The biggest loss to state coffers would be $1.2 billion in income tax revenues, she said.
A cut in taxes will no doubt appeal to voters during these hard times, but they may not realize the harm to the state, several said. It is hard to get that more subtle message across when people hear they may have more money in their pockets.
Colorado would lose roughly half of its general fund revenue, which would mean that almost all of what is left would have to go to K-12 education, said State Sen. Greg Brophy.
He estimated that 99.2 percent of state funding would be required to go to elementary and secondary education, leaving little for roads, prisons, colleges or Medicaid, he said.
"Higher education would just be done," Brophy said.
Brophy reminded the crowd that he is a noted fiscal conservative, but this is too much.
If it is passed and people begin to see the tough times it brings, the Taxpayers Bill of Rights (TABOR) would be repealed the next year, Brophy predicted.
Rural areas would be hit even more quickly than the Front Range because of their relatively smaller budgets, said Washington County Commissioner David Foy.
Also, government spending is a bigger part of the rural economy, Shull said. Rural areas would suffer when many teachers and other government employees were laid off, and business for stores was cut by the loss of their incomes.
Vehicle registration fees which would be reduced are the only thing helping keep bridges safe in Colorado, said Morgan County Commissioner Laura Teague.
Voters should think about how old the transportation infrastructure is and how quickly it could crumble if there was not enough money to keep it in shape, she said.
Initiative 101 would lower income tax from 4.64 percent to 4.5 percent immediately and incrementally to 3.5 percent eventually, Shull said.
Except for 9-1-1 fees, it would eliminate all state and local charges on telecommunications bills, she said.
This last is a problem for Morgan County and Northeast Colorado, because rural areas do not pay the full cost of telephone service, Shull said. Rural telephone service is subsidized and would be much more costly without the small fees on telephone bills.
Initiative 101 would also lower specific ownership taxes to $2 on new vehicles and $1 on used vehicles over four years; eliminate taxes on the first $10,000 of vehicles, rental and lease vehicles; and reduce vehicle registration fees to $10, she said.
Amendment 60 is an amendment to TABOR, which would cut K-12 school district revenues from property taxes in half, requiring the state to make up the loss of revenue to the tune of $1.2 billion, Shull said.
The state does not have that money and is struggling to balance its budget now, she said.
Also, if an area does not cut its property taxes by 2020, tax levels would be automatically reset to 1992 levels – the time when TABOR was approved, Shull said.
Amendment 60 would not allow related tax and debt issues on the same ballot, and local residents could start initiatives in much the same way as state ballot initiatives are done, at least on issues concerning property taxes. she said.
It would also require local authorities and enterprises to pay property taxes for such entities as water, fire and sewer enterprises for cities, Shull said. At the state level, colleges would have to pay property taxes, as would wildlife authorities and correctional industry facilities.
Those who own property would not have to live in an area to vote there under Amendment 60, she said. They would be allowed to vote anywhere they own real property.
Property tax increases could only last for 10 years, Shull said.
Amendment 60 would overturn local elections which "de-Bruced" various civic entities, which freed them from some provisions of TABOR to do a variety of things, she said. Future "de-Brucings" would only last four years.
Amendment 61 limits debt by government by banning bonding, certificates of participation, lease purchase and tax anticipation, Shull said.
If voters approve taxes for projects such as building schools, those taxes can only last for 10 years under Amendment 61, she said.
After current borrowing is paid off, non-enterprise tax rates would have to decline, Shull said. At the state level, that would mean that the Colorado Department of Transportation would be injured due to a loss of gasoline taxes.
Amendment 61 is perhaps the hardest to understand, she said.
If a city is limited to borrowing for only 10 years, it would not be able to pay off required building projects such as water treatment plants, Shull said.
Foy asked people to imagine how high taxes would have to go in order to pay off a big project within 10 years.
Municipalities and counties would also have to raise fees, Shull said.
It is like telling family members that they cannot buy a house unless they can pay it off within 10 years, she said.
In addition, governments could only borrow up to 10 percent of the assessed value of property within their boundaries, Shull said.
It will be a real challenge to let people know how destructive these issues could be, Shull said.
"Who wouldn't want tax cuts?" she asked.
It is crucial people learn how this would affect them locally, Shull said.
Under Proposition 101, local school districts would lose almost $1.3 million, she said.
The Morgan County government would lose close to $1 million, Shull said.
Cities and towns in the county would lose close to $200,000, hospital districts $60,000, fire districts $47,000, library districts $47,000 and water districts $45,000, she said.
Shull said that provisions get down to a ridiculous level.
For instance, the county would not be able to lease copy machines without a vote of the people, she said.
– Contact Dan Barker at email@example.com.