$300 million justice tax may be on ballot

By Dan MacArthur
North Forty News

Expect the "education" to begin soon as officials start working to win voter approval for a $301 million tax increase to finance expansion of the jail and other criminal justice programs.

The Larimer County commissioners have all but pledged to place the tax issue on the Nov. 7 ballot. It currently calls for increasing the county sales tax by 0.2 percent and property taxes by five mills for the next 10 years. Revenues would finance a yet-to-be-determined package covering construction, programming, operating and maintenance costs. Criminal justice coordinator Angela Erker is scheduled to present a detailed proposal to the commissioners for formal action this month.

If approved, the proposal would bring combined county government sales taxes to the maximum 1 percent it can collect, barring action by the state legislature.

This sales tax increase would extract an extra two cents on every $10 purchase. The added property tax would raise taxes on a $250,000 home by nearly $100 a year. Businesses would pay about four times the residential rate, as they already do under state law limiting increases in residential taxes. The proposed property tax--a 22 percent increase in the county's current 22.54 mills--would generate two-thirds of the estimated revenues. (When all property taxes are combined, the county tax is less than one-third of the total.)

Still, the tax revenues would fall far short of the estimated $2 billion in identified needs for the county criminal justice system during the next 20 years. While some supported seeking more money for a longer period of time, the commissioners and the criminal justice advisory committee in February finally concurred that the tax proposal was the most that voters realistically could be expected to approve.

Noting that fully funding all the demands could require as much as an additional 15 mills in property tax, county manager Frank Lancaster contended, "That's a sharp stick in the eye."

Commissioner Kathay Rennels characterized the adopted proposal as "the least we could do and the most we could get." Sheriff Jim Alderden agreed, saying it is "probably as much as we can hope for." Rennels and Alderden, both seeking re-election, said they would publicly support the tax proposal.

"We're just not going to be able to do the projects we wanted," said Lancaster.

Not enough

"Everything will have to be scaled back proportionally," county budget manager Bob Keister later explained. He predicted the county would have to again go back to voters for more money in five to 10 years - especially if the proposed property tax also ends in a decade, after the criminal justice system has come to depend on its revenues.

Keister said the main element of the package is expansion of the detention center, adding 100 to 200 beds at a cost of up to $50 million.

However, Keister said, there will be enough to also pay for new programs, particularly in the area of mental health. He added that a significant share of the additional tax revenues would have to go toward the rapidly rising rate of detention center operating costs, which he projected to increase 8 percent annually.

"It takes a huge amount of money to put people in jail and watch them 24 hours a day," Keister said.

He sounded another caution that the new revenues may not go as far as expected if his other assumptions prove incorrect. Although sales tax revenues have been flat for the last four years, Keister projected they would increase 3 percent annually. He similarly predicted that property tax revenues would grow 4 percent annually, assuming the bubble in the real estate market doesn't burst.

Lancaster said another citizens advisory committee suggested raising additional revenues through a jail impact fee assessed on new home construction. That revenue would be limited, however, unless the municipalities agreed to collect such a fee for the county on houses built within their boundaries.

"We would need to have Fort Collins, Loveland and the other cities agree to do this," said Lancaster.

While all acknowledged that the tax package will be a tough sell, they were optimistic about the findings of a pair of polls commissioned by the county. Those surveys showed that residents preferred short-term use of sales tax because the burden is shared by those visitors creating a demand for services rather than being imposed solely on permanent residents. The polls also indicated strong support for extending the current 0.2 percent sales tax. It continues until 2012 when bonds are retired for the $13.2 million jail expansion in 1999. The tax then decreases to 0.15 percent until it ceases in 2014.

Based on the survey findings that a large majority of residents feel extremely safe, most agreed that the educational campaign must emphasize that the new taxes are needed to maintain that sense of security.

"Once people understand the problem, they're very supportive," said Lancaster.