Measures target state, local governments

By Cherry Sokoloski
North Forty News

There are three initiatives on the November ballot that, if passed, would severely cut income options for state and local governments, as well as numerous other entities.

The initiatives, Amendment 60, Amendment 61 and Proposition 101, would slash revenues for these entities and impact basic services such as water, sewer, schools and fire protection.

As a group, the ballot measures would limit the ability of state and local governments to levy taxes and incur debt for projects. Local library districts might not be able to levy taxes at all.

If the initiatives receive voter approval, one thing is clear, according to local officials: Public services would be drastically cut, and it would be difficult for local or state government to make major improvements such as building new schools or roads.

Organizations that represent local governments, such as the Colorado Municipal League, are marshalling forces to oppose the three ballot measures. The CML held a forum on Aug. 24 in Windsor, and several officials from Larimer County attended.

At the forum, some commented that the ballot measures were spurred by anger at the federal government and its increasing debt. However, all three initiatives target state and local government spending and debt and would have no impact on the federal government.

Measures outlined

Amendment 60 would reduce property taxes. It would also override previous "de-Brucing" votes that allowed government entities to keep revenues above limits set by the Taxpayer's Bill of Rights. The term refers to Douglas Bruce, author of TABOR. Many local entities, including fire districts, Wellington, Larimer County, Fort Collins and Poudre School District, de-Bruced several years ago. Revenue levels would be severely cut back if this measure were to pass.

Amendment 61 would eliminate or restrict government borrowing. It prohibits the state from incurring any debt at all and limits local borrowing, making financing of capital projects difficult.

Proposition 101 would reduce or eliminate several taxes related to income, autos and telecommunication services. For instance, ownership taxes for vehicles, which are personal property taxes levied each year, would decrease over four years to $2 for new vehicles and $1 for used vehicles. Currently, the average ownership tax is $77.62 per vehicle. In addition, there would be no state or local sales taxes on vehicles for the first $10,000 of value.

In Larimer County, revenues from the ownership tax would drop from $24.5 million to about $378,000 per year, according to the Bell Policy Center.

Officials agree that many of the provisions in the ballot issues are unclear and, if passed, would have to be interpreted by the court system.

Schools, libraries hit

Poudre School District, along with all other school districts in the state, would be hard-hit by Amendment 60. The ballot issue mandates that school districts phase out one-half of their current property taxes by 2020.

In June, the PSD Board of Education passed resolutions opposing all three ballot initiatives.

Under Amendment 60, the state would be required to backfill lost revenues to school districts, but no state revenue source is provided in the measure. In fact, the state would have even less money than it currently does if the three measures pass. In the last legislative session, lawmakers had to deal with a $1 billion revenue shortfall. The proposed measures, according to Ken DeLay of the Colorado Association of School Boards, would put Colorado another $1.2 billion in the hole.

For example, under Proposition 101 the state income tax would drop from 4.63 percent to 4.5 percent next year. The rate would continue to decrease until it reaches 3.5 percent.

Both the Poudre River Public Library District and the Red Feather Mountain Library District have appointed boards, and as a result, they could lose all tax funding if Amendment 60 passes. The measure states that districts and authorities with unelected boards may not levy mandatory fees or taxes on property.

PRPLD currently collects a 3-mill tax to run its library system, and RFMLD collects 2.5 mills in property taxes. Voters approved both taxes.

Holly Carroll, executive director of PRPLD, said that, if the measure passes, the state legislature would have to deal with the question about whether future library boards would have to be elected.

Borrowing limited

Susan Kirkpatrick, former Fort Collins mayor and currently executive director of the Colorado Department of Local Affairs, minced no words in describing the impacts of the three ballot measures.

"Both the state of Colorado and communities throughout the state would be devastated if one or all of these pass," she said. "Colorado was just identified as one of the top three places to do business in the nation, and if these pass, our position would be seriously threatened."

Referring to Amendment 61, which would prohibit borrowing by the state, Kirkpatrick likened Colorado to a typical family. "Most of us can't pay cash for our houses," she said. "We get mortgages and pay for them over time."

The state and local governments operate in a similar fashion, she noted. Local governments borrow money to build water and wastewater plants, then pay for them over time with revenues from ratepayers. "They can't just pay cash for them," she commented.

The same holds true for school buildings and roads, Kirkpatrick said; borrowed money is used to build these projects. Under Amendment 61, local governments would be allowed to incur debt, but that process would be more difficult. For example, any debt incurred by local governments would have to be repaid within 10 years, compared with 20 or 30 years by current practice.

Proposition 101 would drastically reduce fees and taxes on motor vehicles. "Who thinks, given our need to repair existing transportation and build new, that somehow we'll be able to maintain a transportation system?" Kirkpatrick asked.

Overall, Kirkpatrick said, the decline in revenues for local governments "would be devastating to services that we take for granted like water, wastewater, roads and schools – services that are expected in a civilized nation."

Kirkpatrick added that both state and local governments are already required to have balanced budgets every year.

County, PFA impacted

Larimer County officials estimate that the measures, if passed, would decrease the county's annual budget by $14 million to $18 million once the phase-in period is complete. The county is currently in its budget-planning process, and manager Frank Lancaster has asked departments to prepare two budgets, one assuming the status quo and the second assuming the ballot measures pass.

Proposition 101 alone, Lancaster said, would force a 47 percent decrease in the county's road and bridge budget.

Guy Boyd, director of administrative services for Poudre Fire Authority, said the fire department's revenues would decline significantly if the three measures pass, producing "tremendous uncertainty in how you provide services." Response times would be impacted, he said, and PFA would have to close some of its fire stations.

PFA is already struggling with revenue reductions, Boyd noted, and has been using reserves to maintain its level of service.