November’s ballot will include three tax-cutting ballot measures.Proposition 101 changes the state statute regarding income tax rates, vehicle registration and ownership fees and telecommunication fees. Amendments 60 and 61 amend the Colorado Constitution with regard to property tax laws and the Taxpayer Bill of Rights.TABOR’s author, Douglas Bruce, declined to be interviewed for this article. He did ask that all questions be directed to info@cotaxreforms.com.The following was one response from info@cotaxreforms.com:”Just by stabilizing taxes, TABOR [passed in 1992] brought 8 years of prosperity to Colorado, when we had started in a recession. Government spending is not working; we all see that. Put your faith in the private sector and free markets. They always work until government regulations choke them.”The El Paso County Business Conditions Index in the 2010 Quality of Life Indicators for the Pikes Peak Region shows that El Paso County’s economy declined from 2001 to 2003.After peaking at the end of 2004, the county’s economy plunged at the end of December 2004 to its lowest point since the index was created in 1998. The economy started to rebound at the beginning of 2009.Stephannie Findley of the Colorado Springs Chamber of Commerce said the chamber is alarmed about the ballot measures and is leading the opposition to them.Findley said at least one business has put its plans to move to Colorado Springs on hold until the outcome of the election is known.”Every business owner and every employee ought to be concerned about these amendments, and should really check into what they really mean,” she said.Proposition 101The stated goal of this measure is to reduce government revenue by lowering the vehicle registration fee to $10 a year and the ownership tax on a new vehicle to $2 and $1 a year for all other vehicles.This proposition also eliminates Colorado taxes on renting or leasing a vehicle and taxes on telecommunications fees, except the 911 fee, which is fixed at the 2009 rate.Proposition 101 also lowers the state income tax rate from 4.63 percent to 4.5 percent in 2011 and further states: “Later rates shall decrease 0.1 percent yearly, until reaching 3.5 percent in each of the first 10 years that yearly income tax revenue net growth exceeds 6 percent.”According to www.cotaxreforms.com, Proposition 101 will help the economy because most people will spend their tax savings, which will increase jobs, savings, investment and sales tax revenue.Andre Brackin, head of the county’s transportation department, said Proposition 101 will lead to a 32 percent reduction in the transportation department’s budget by 2014.Brackin said the county might discontinue its new program of maintaining gravel roads with 6 inches of gravel. If all you can afford is 2 inches of gravel, you might as well not waste your time, he said.The county could limit snow removal to regular work hours only, because they won’t be able to pay overtime, Brackin said. “My biggest concern is the safety component. The roads will not be as safe.”Commissioner Sallie Clark said the Pikes Peak Rural Transportation Authority would lose $30 million over eight years and would have to abandon plans to build important road projects.Findley called it a quality of life issue.”If you can’t build roads and bridges, why would businesses want to be in Colorado when they can be in another state that isn’t so restrictive?” she asked.Proposition 101 also affects schools and fire districts.Nine percent of Falcon fire district is funded by vehicle registration fees, said Falcon Fire Protection District Chief Trent Harwig.Peyton School District 23 will lose $100,000 in funding if Proposition 101 passes, said Tim Kistler, district superintendent.But others favor the proposition.”Proposition 101 would really help the people with the cost of license plates and the ownership tax,” said David Hicks, who has lived in Calhan for 35 years.They never repair the roads, even though they use them as an excuse to raise taxes, Hicks said.When he recently bought a Toyota Prius, the registration fee was $514, compared to the $15 and $20 he paid to license cars when he lived in South Dakota.”It’s a strong measure, but I think it’s something that’s been needed because they keep increasing and increasing the cost of license plates,” he said.While Proposition 101 does impact schools and fire districts, they are more affected by Amendments 60 and 61.Amendment 60This amendment would require school districts to cut mill levies for non-debt-related expenses in half by 2020.The amendment also limits future voter-approved mill levy increases to no more than 10 years and overrides the decisions of local voters to set aside TABOR revenue restrictions.It also states that “state aid shall replace” revenue that the states will lose by cutting their mill levies.According to an e-mail from info@cotaxreforms.com, “Schools will not lose one dollar from A-60 or the much lower replacement cost of ownership taxes in P-101. More state aid is a good thing. The Constitution requires it in Article IX, Section 2.”If all three ballot measures pass, Falcon School District 49 will have to cut funding by about $1,100 per student, said Jolene Schaake, D 49’s chief financial officer. “We would lose about $917 per student or about $650,000 a year,” Kistler said.He said D 23’s board has already made budget cuts because of reduced state funding.”Our bond fund balance is just enough to cover several years [of declines], and we hope that valuations come back up,” Kistler said. “But what happens if we have two or three years where [valuations] go down?”School and fire districts are already facing budget cuts because taxpayers will pay less in property taxes next year, Harwig said.Proposition 101 reduces the state’s income tax rate, and there is already a state budget shortfall of $257 million for the 2010-2011 fiscal year, according to a Sept. 21 article in The Denver Post, citing Natalie Mullis, Colorado’s legislative chief economist. How will the state make up the revenue, as required by Amendment 60?”They’ve hand-cuffed the state in this issue,” said Andy Holloman, D 49’s treasurer.”You can’t take [funding] away, and say, ‘I hope it comes back in some magical form.’ It’s not going to recreate itself someplace else. It has no means for doing that.”Harwig said if passed, Amendment 60 would override the mill levy increase voters approved in 2000.”It’s unclear how much this would reduce our mill levy, but any amount would have a negative impact on services we currently provide,” Harwig said.”Falcon fire is 91 percent funded by property taxes. A reduction in property taxes now, on top of lower assessed property values, would be a double hit to the fire district.”Seventy-three percent of the Falcon fire district budget is related to the cost of salary, benefits and insurance for employees. Just a 9 percent reduction in revenue to the district would require a cut in services, Harwig said. “Those cuts would most certainly result in the loss of career firefighters,” he added.If these measures are approved, we’re facing a 50 percent reduction in our budget, said fire chief Jack Rauer of the Peyton Fire Protection District. Such a reduction would derail the Peyton district’s efforts to lower homeowners’ insurance rates through an improved rating from the Insurance Service Office.A few years ago, the district’s voters approved a mill levy increase that funded the lease-purchase of equipment and firefighter training needed to conduct the required ISO test.”Three-quarters of our volunteers have medical training, and half of our emergency medical technicians are now intravenous-certified. That’s important in a district where 78 percent of the calls are medical,” Rauer said.”If these measures pass, I don’t think Peyton will be able to keep its current ISO rating of 9, or any improved rating we might get because of the test. “People don’t realize if these go through, it will affect their ISO rating. Homeowners insurance rates will go up by quite a bit,” Rauer said.Jeff Wright, El Paso County resident, said he supports all three ballot measures and does not agree with opponents’ claims that Amendment 60 repeals local control of school and fire district funding.Those votes to de-TABOR were unconstitutional because they were permanent. Amendment 60 includes a provision allowing districts to re-de-TABOR for four years, Wright said.”I don’t think anybody would disagree that somebody in one generation should not be able to elicit a spending vote that’s going to carry on forever to another generation,” he said.Amendment 61This amendment prohibits the state and its agencies from any kind of indebtedness. It prohibits local governments from issuing any form of indebtedness, except for bonds having a maximum duration of 10 years. Elections on tax issues must be held in November.Richard Brown works for Pikes Peak Regional Water Authority and helped write the Colorado “Blue Book,” which will be mailed to voters to explain the ballot measures.Brown spoke at the Woodmen Hills Metropolitan District meeting Sept. 16 and identified the Colorado Water Conservation Board as one state agency that will be crippled if Amendment 61 passes.”The CWCB would not be able to enter into agreements with the federal government for water projects, because the CWCB would not be able to assume the debt,” he said.Over the past five years, the CWCB has made more than $84 million in low-interest loans to 11 Colorado cities and more than $260 million in loans to 34 districts for water projects that would be prohibited by Amendment 61.The CWCB calculates that 95 percent of those cities and districts couldn’t afford to pay back those loans, if the loan period is shortened to 10 years, he said.According to www.limitcodebt.com, Amendment 61 will save money by reducing the amount of interest taxpayers pay, but Brown said the cost of borrowing will actually go up.The bond market will realize that Colorado will have to issue bonds after the November elections. They’ll run up the interest rates because we’ll have no place else to go. It will become a lender’s market, Brown said.Long-term debt created prior to Amendment 61 will have to be restructured and paid off in 10 years, said Larry Bishop, WHMD general manager. To do that, “fees are going to go through the roof,” he said.School and fire districts will also feel the impact of Amendment 61.The Falcon fire district used a lease-purchase agreement to build the new fire station in Woodmen Hills and uses lease-purchases to buy new equipment such as fire trucks, Harwig said.”If we’re required to have voter approval for the purchase of a new truck, it would add about $10,000 to the price,” he said. “That $10,000 would be the cost for Falcon fire district to put a measure on a general election ballot.”Schaake said school districts are currently allowed to spread the cost of borrowing to build new buildings over 20 or 30 years.Limiting bond issues to 10 years will require a faster payback and a larger mill levy increase to do the same amount of borrowing as a 20-or-30-year bond, she said.Amendment 61 also reduces school districts’ bonding capacity from 20 percent of current assessed value to 10 percent of current assessed value on all financing, including capital leases, Schaake said.Although the recession has slowed D 49’s growth, the district is at 103 percent capacity and still needs to build schools, Holloman said.Data provided by Melissa Andrews, D 49’s planner, shows the district’s student population will grow from about 15,000 students this year to just over 23,000 students in 2019.As a conservative in a conservative area, Holloman said he understands peoples’ frustration with what’s happening nationally, but they’re taking action locally in an area that’s been fiscally responsible all along.Holloman said passage of all three ballot measures would be a game-changer for school districts.”If they pass, it’s a different ballgame for education going into the future. Not just for us as a district, but for all districts and the state, too,” he said. “You would have to take all the pieces off the table and reconstruct it as something very different than what exists today.”We might miss [educating] a generation of kids. What price will we pay for not being able to educate our kids at one of the most reasonable [tax] levels of any state in the nation?”Wright, however, said the state is on an unsustainable path with debt and spending growing at twice the rate that the state’s gross domestic product is growing. “If you do nothing, that trend continues. Some restructuring is going to be required,” he said.County commissioner Amy Lathen said if the three ballot issues pass, the county will have to cut $5.1 million from the road and bridge fund and $8.2 million from the general fund, which funds the district attorneys’ office and the sheriff’s office.”That’s just what the numbers are,” she said. “And it’s up to the people to decide what to do.”Although it will be in the hands of the voters, Hicks said the Colorado Springs City Council’s resolution against the three ballot measures is troublesome.”They’re trying to influence voters and I don’t think that’s right,” he said. “Anytime the politicians go against a bill, you can be sure it’s something the people would benefit from.”
