If there was one overriding theme to Tuesday’s off-year election, it would concern the willingness of local and state voters to tax themselves to pay for government services – a willingness that ended up differing considerably from district to district.
Locally, voters in the Town of Basalt, Eagle County and Pitkin County opted for more taxes, but on the state level, Colorado’s citizens weren’t feeling so generous, defeating a measure that would have allowed the state to keep excess tax revenue rather than refund it to the electorate.
Basalt passes 3A
Among municipalities in the Roaring Fork Valley, Basalt had perhaps the most at stake in the election in the form of Ballot Issue 3A – Set Basalt General Operating Mill Levy. Characterized as a tax increase of $740,000, 3A actually asked Basalt voters if they wanted to keep property tax mill levy rates at their current level rather than being forced to lower them to a level set a decade ago.
Basalt citizens voted in favor of 3A by a margin of 63.4 percent to 36.6 percent (629-363). The issue’s passage means that Basalt’s property tax mill levy rate will stay at 5.957 mills (roughly $5.96 per $1,000 of a property’s assessed value) rather than defaulting to a TABOR-required rate of 2.562 mills, which would have happened had 3A failed. This would have led to cuts in town services like public safety, fire and flood mitigation, road maintenance, sidewalk repair, street plowing, park maintenance and recreational programs.
The rate would have been forced to be lowered without 3A’s passage due to stipulations set forth in Colorado’s Taxpayer Bill of Rights (TABOR). That law, enacted by state voters in 1992, ensures that tax rates in Colorado municipalities can’t be raised without voter approval. It’s a law that Basalt inadvertently ran afoul of numerous times in the last decade.
In 1992, when TABOR went into effect, Basalt’s mill levy rate was 6.151 mills. As the town grew and the property-tax base expanded, the rate was dropped 15 times in 17 years, which the town was able to do legally without voter approval.
The rate bottomed out at 2.562 mills in 2009. Since then, Basalt has illegally raised the rate a number of times, mistakenly believing it could go back up as high as 6.151 mills without going to voters for approval. In reality, under TABOR, the rate would need to be set at the 2009 level, as anything higher was never voted on. As a result of the illegal tax increases, Basalt was forced last month to refund more than $2 million in over-collected revenue to property owners in town.
Ballot Issue 3A allows the town to get around TABOR laws by, essentially, forgiving Basalt for the crime of illegally raising the mill levy. It’s an example of what is commonly called “de-Brucing,” in honor of limited-government proponent and former state legislator Doug Bruce, the man who authored TABOR.
By de-Brucing and passing 3A, Basalt can now adjust property tax rates to any level lower than or equal to 5.957 mills without going to voters to approve increases. Any attempt to raise rates higher than 5.957 mills would still require voter approval.
Up in smoke taxes
Two other ballot issues affecting Basalt tax-wise passed with flying colors when both Pitkin and Eagle counties voted for similar tobacco-tax increases.
Eagle County Ballot Issue 1A, which passed 68.8 percent for, to 31.2 percent against, (7,550-3,424), will impose an additional tax on cigarettes of $4 per pack and an additional tax of 40 percent on other tobacco products.
Pitkin County Ballot Issue 1A, which passed 78.75 percent for, to 21.25 percent against (3,939-1,063), will also impose a 40 percent tax on non-cigarette tobacco products. However, Pitkin County’s new cigarette tax will start at $3.20 per pack in 2020 and go up 10 cents a year until it reaches $4.
The revenue generated from the taxes – projected to be $4.5 million in Eagle County and $700,000 in Pitkin County – will be applied toward tax collection, enforcement, public health programs, tobacco and substance abuse prevention and mental health programs. Both counties’ new taxes will go into effect starting Jan. 1.
See you later CC
The biggest election-day loser was Proposition CC, a state measure that was an attempt to do some de-Brucing on the state level while generating additional revenue without raising taxes.
Because of TABOR, the state government has to budget for how much tax revenue it expects to collect each year. In lean years, when the state comes up short of its projections, it just has to deal with the shortfall, but in productive years, when revenues exceed their projections, the state has to refund the money to taxpayers.
Proposition CC would have allowed the state to get around TABOR law by keeping any excess revenue collected each year. The money was slated to be used to better fund public schools, higher education and roads, bridges and transit. Colorado voters defeated it by a margin of 55.12 against versus 44.88 for.
“Prop CC always faced an uphill battle, as is the case with any revenue-related ballot measure here in Colorado,” said Carol Hedges, executive director of the nonpartisan Colorado Fiscal Institute, in a press release. “By using one of the few tools they have to solve the problems that Coloradans want them to solve, lawmakers tried to address the important goals of improving schools, building the roads and transit systems that will power our economy for decades to come, and making college more affordable. Unfortunately, not enough of the people who voted in this election agreed that this was the way to do it.”
Another statewide measure, Proposition DD, just barely passed by a margin of 50.48 percent for and 49.52 percent against. Characterized as a tax increase of $29 million annually because of TABOR rules, DD will actually legalize sports betting through licensed casinos and generate revenue by taxing it. Collections from the tax will be used by the state government to fund state water projects and other commitments and pay for the regulation of sports betting.