Gradual property tax relief benefits everyone
This two-sentence petition only slows the growth of City revenue, without cutting it one actual dollar. It won't force any true "cuts" on City Hall in year-to-year revenue or programs. It applies ONLY to City property tax, not to schools, library, county, etc. It says the current property tax, about 4.27 mills, must phase out annually, to 3 mills, 2 mills, 1 mill, and then zero, BUT ONLY if City total revenue continues to grow AT LEAST $2 million more than that property tax relief.
For example, if the tax rate relief in 2015 property tax, paid in 2016, is $5.8 million, total City revenue in 2015 must have grown at least $7.8 million above 2014 total revenue for the relief to apply to lower 2015 property tax paid in 2016. If City total revenue in 2015 grew "only" $7 million above 2014, then the 2015 and later annual property tax relief steps could be delayed one year for each remaining step of tax relief until total yearly revenue grew enough to give the City at least a $2 million year-over-year net revenue increase. The City can always lower taxes, but they don't have to unless required by TABOR (Taxpayer's Bill of Rights) legal requirements or by this voter-approved petition.
What is the reason for the $2 million guaranteed increase before any year's tax relief? It is not because the City needs the money; the City wastes tens of millions yearly. It is to prove false the big spenders' political campaign argument and scare tactics that the tax relief will "cut" any City services. What services must be cut if their annual total revenue is increasing $2 million? NONE! If your salary went up $20,000 next year, what would YOU have to cut from your family budget? NOTHING!
We will be sure to get Year One of property tax relief because the total revenue in 2015 is projected to be $445 million, $49 million more than in 2014. Of course, City Hall will fight this modest petition to require 12% of their 2015 revenue increase to be shared with taxpayers. In their minds, they never have enough of your money. That's why City Hall never proposes lower taxes.
The phrase "total City revenue from all sources" includes revenue to Utilities and all other City enterprises. The $49 million example for 2015 growth in all sources includes other enterprises but does not include added growth in Utilities because it is not posted in the preliminary 2015 "total" budget even though it is part of the comprehensive total. For this petition, growth in Utilities revenue is part of growth in "total revenue from all sources." The Council now raises Utilities rates without voter approval to create "excess revenue" which it then seizes and puts in the general fund like any other tax. That amount is about $32 million yearly and violates voter-approved issue 300, which prohibits enterprises from money laundering their revenue to evade the voter approval required by the Taxpayer's Bill of Rights. It is a sleazy accounting gimmick to violate both TABOR and issue 300.
The City has one overall budget, which includes smaller enterprises, but not Utilities. It treats Utilities differently, with its own budget. This petition does not distinguish among enterprises; all produce City revenue. An enterprise is a City-owned business, so growth in enterprise revenue is part of the true total. The standard is ALL money coming into the City, not just into the general fund part, which is only a fraction of the total. To exclude the largest enterprise would be irrational and defeat the purpose of limiting growth in total City revenue. The larger the denominator ("total revenue from all sources"), the more likely the City will grow at least $2 million yearly and therefore continue the yearly phase out of the property tax rate. So for this petition only, the word "City" includes enterprises, which is why it says "total" and "from all sources."
Property tax relief is very important for seniors and others living on a fixed income. It is heartless to tell Grandma she must eat cat food so the City can pay hundreds of six-figure salaries to career bureaucrats. We must end that shameful and arrogant practice, that reckless and wasteful misuse of our tax money. They must learn to respect us taxpayers, not simply treat us as cash cows to be milked to the max.
The City would also phase out the unfair business personal property tax. El Paso County does not charge that tax; neither should the City. When a business buys equipment, it pays sales tax. Every year, it must pay a property tax on that equipment (double taxation). When it makes a profit from using that equipment, it must pay an income tax (triple taxation). When the business is sold, it must pay a capital gains tax (quadruple taxation!) Is it any wonder local business is slow to recover? El Paso County's positive tax message is negated by City Hall.
The City hires bureaucrats for "economic development." Their job is to give insider deals and tax breaks to local and out-of-state businesses. That is a denial of equal protection of the law to those who don't have political influence or lobbyists or money to give to City politicians' campaigns. We could save the salaries of those who give favors with public funds to special interests. Simply lower City property taxes equally for everyone. That is fair.
Imagine the public relations benefit of national ads telling all businesses that we are the largest city in America without a city property tax! (Montrose and other cities don't have a property tax but they are much smaller.) We will no longer bribe some foreign businesses with cash kickbacks paid by their local competitors. That is very unfair to existing businesses in our city. Business leaders won't have to worry that the current handout will end; this will be a lower tax rate for all, and can be raised back only with voter approval.
The City collects about $4 million yearly in lodging and rental car taxes. About $3 million of that goes to a private company to advertise Colorado Springs elsewhere. With the national publicity of this jobs magnet as a substitute, the City could divert that $4 million to fix potholes and make other visible improvements. A well-run and prosperous city with low crime is the best advertising for both tourists and job seekers. We would stand out from those other cities who overstate their assets and conceal their problems.
Whenever the cost of owning something declines, its value goes up. When property taxes go down, property values go up. That applies to owner-occupied, residential rental, and business property. Lower taxes spur higher investment. They will be a magnet for relocating businesses, while helping equally those businesses already here.
As a matter of state law, property tax rates on business are 3.64 times higher than on residences. A $100,000 office pays 3.64 times more tax than a $100,000 house. That unfairness sends a hostile signal to businesses thinking of expanding here and creating local jobs. How will your children live here and buy a home if they can't get a job?
Whenever government allows more money to remain in the private sector, it boost consumer spending (and sales tax revenue), business investment, and expansion. That means more jobs. Our economy is flat. We need the boost that comes from lower taxes and higher growth. That has proven true nationally for the past 90 years--tax cuts by Coolidge, Kennedy, Reagan, and George Bush always triggered healthy economic growth. People work for money. The more money they can keep, the harder they will work. The question is, "Are you ready for a return to prosperity?" YES!
Why is Colorado Springs slower to recover than other Colorado cities? We have been raising sales taxes recently! Consider the $6 million yearly parks tax, the $27 million yearly police and fire tax, the $70 million yearly roads tax, and the $17 million yearly sheriff's tax. All are sales taxes. The recent defeat of the $40 million yearly rain/drain tax on our property tax bills shows people don't want higher property taxes. Let's vote for what we clearly want-- lower property tax bills!
Everyone wins with our tax relief petition. Even the City would have an incentive to be more efficient. Wouldn't it be amazing for City Hall to spend time thinking how to SAVE money, not SPEND it?