[Issue 2C] [Issue 300]

Issue 2C

Ballot Title:

"SHALL CITY TAXES BE INCREASED $46,000,000 ANNUALLY BY INCREASING 2009 GENERAL PROPERTY TAX 6.00 MILLS, 1.00 ADDITIONAL MILL PER YEAR FOR FOUR YEARS, CONTINUING THEREAFTER, CONSTITUTING VOTER-APPROVED REVENUE CHANGE?"

Issue 2C proposes to:

• Increase the general property tax mill levy by 6.00 mills for 2009 and 1.00 mill each year thereafter for four years, at which time the general property mill levy tax in 2014 is estimated to be 14.279 mills.
• Increase the general property tax mill levy to support general governmental services to the citizens of Colorado Springs including police, fire, parks and recreation, infrastructure, transit, and community development.
• Exempt the revenues generated from the Taxpayer Bill of Rights (TABOR) spending and revenue limitations pursuant to Colorado Constitution, Article X, Section 20, and City Charter, Article VII, Section 7-90.

Background and Provisions of the Proposal

Since 1990, the City's property tax mill levy has been reduced eight times; six of those reductions were the result of the revenue limitation provisions of the Taxpayer's Bill of Rights (TABOR).  Absent any voter approved change, the 0.665 mill levy will expire at the end of 2009, and the mill levy for 2010 will be 4.279 which is more than 30% below the 1990 mill levy.  Each mill of the proposed increase will generate approximately $4.6 million per year resulting in approximately in $27.6 million in additional revenue in 2010 and $46.0 million in additional revenue in 2014.

Arguments For:

• This ballot issue increases the property tax mill levy 10 mills over a five year period, with 6 mills in 2009 and 1 mill each of the next four years and will generate funds sufficient to maintain essential city services in 2010 at the level provided in 2009.
• Strong police and fire departments and well-maintained parks and streets protect property values and ensure Colorado Springs remains a great city for families.
• The City of Colorado Springs currently has a 4.944 mill property tax which is one of the lowest municipal mill levy rates in the state.  Compared to other cities of similar size on the Front Range including Denver, Pueblo, Fort Collins and Aurora, Colorado Springs currently has one of the lowest per capita total tax burdens.
• Best practices recommend a diversified tax base to provide greater stability.  Increasing the property tax mill levy would better balance the City's tax base and create greater long-term financial stability.
• For the owner of an averaged-priced home of $262,000, the additional property tax cost the first year would be $125 or less than $2.50 a week.  At the end of five years, the total additional property tax would cost the average homeowner $209 a year, or $4.00 a week.  Property owners itemizing federal income tax returns can annually deduct these taxes.
• The cost in 2010 to a small business with real property having a market value of $500,000 would be $870 or less than $16.75 a week.  At the end of five years, the additional mill levy would cost the business $1,450 a year or $27.88 a week.

Arguments Against:

• Increasing property tax does not address the City's expected budget shortfalls beyond 2010.
• Depending upon the school district and special taxing district in which property is located, citizens and businesses would see property tax bills increase by up to 10.2% in 2010 and up to 17% in 2014.
• Increasing the property tax mill levy increases the proportion of revenue the City receives from property owners.
• Currently, the owner of an average-priced home of $262,000 already pays over $89 in property taxes or approximately $21 per mill to the City each year.  This issue would increase an average residential property tax about $125 per year in 2010 (34¢ a day) and about $209 per year in 2014 (57¢ a day).  Homeowners could spend that money on other essentials.
• At the end of five years, the $5,800 increase that an average small business will have paid to the City could have been invested back into these businesses used to hire or retain employees, or kept as income for the small business owner, many of whom have suffered during the current recession.
• Increases in property taxes cause economic hardship to homeowners on fixed incomes.
• The revenue collected under this proposal goes into the general fund and is not directed to a specific government service.

[Issue 2C] [Issue 300]

Issue 300

Ballot Title:

"Shall an initiated ordinance be adopted by the City of Colorado Springs to read as follows:  Excluding sales and use taxes forwarded from enterprise customers, all enterprise payments to the city shall phase out in eight or fewer equal yearly steps starting in January, 2010, with all yearly savings passed on as reductions to each customer bill in dollar amounts as equal as possible.  Hereafter, all loans, gifts, and subsidies between an enterprise and the city or another enterprise are prohibited?"

Issue 300 proposes to:

• Excluding sales and use taxes forwarded from enterprise customers, all enterprise payments to the city shall phase out in eight or fewer equal yearly steps starting in January, 2010, with all yearly savings passed on as reductions to each customer bill in dollar amounts as equal as possible.
• Hereafter, all loans, gifts, and subsidies between an enterprise and the city or another enterprise are prohibited.

Background and Provisions of the Proposal

This proposal is the result of a citizen initiated petition that was circulated and certified as to meeting the required number of valid signatures in order to be referred to the November 3, 2009 Coordinated Election.

Arguments For:

• All enterprise payments to the city would be phased out over an 8 year period and include payment in-lieu-of-taxes payments and does not affect payments made for direct-billed services received.
• Available City funds would be reduced over an eight year period beginning January of 2010 and prevents city enterprises from contributing to fund municipal services.  An enterprise benefits from municipal services as does any business located in the City of Colorado Springs.  An enterprise benefits from police and fire protection, efficient and maintained infrastructure, and land-use management, among other services, however it would not help fund these services after 2017.
• The amount of Payment in Lieu of Taxes (PILT) in the typical residential utility bill is $4.16 per month. Elimination of the (PILT) paid to the municipal government would reduce the average residential customer utility bill by approximately $.52 per month each year until the full PILT amount of $49.92 is phased out.

Arguments Against:

• When fully implemented, City funds available to provide municipal services to citizens for public safety, public works, parks and recreation, and public infrastructure projects, would be reduced, resulting in service cuts as a result of losing approximately $30.2 million in PILT payments alone.
• Prohibiting enterprise payments to the City results in taxpayers subsidizing enterprise customers.  If the enterprise were a investor-owned utility it would pay sales and use tax, property tax, and a franchise fee to the City.  If an enterprise is not expected to contribute at all to the provision of municipal services from which it benefits (it benefits from police and fire protection, infrastructure, etc.), then the citizens are subsidizing the enterprise.
• Colorado Springs Utilities currently pays the City of Colorado Springs a Payment in Lieu of Taxes which represents the taxes and fees that a privately-owned utility would pay to the City.  The loss of Payment in Lieu of Tax revenue would be approximately $30.2 million when fully implemented.  Currently, Payment in Lieu of Tax revenue is approximately 11% of General Fund revenue.
• This proposal does not phase out payments directly from individual citizens, businesses or non-profit entities to the City.

[Issue 2C] [Issue 300]