By Peter Marcus, DENVER DAILY NEWS
The Denver City Council tonight will vote on a proclamation opposing three anti-tax ballot proposals that opponents say will cripple government’s ability to provide vital public services.
Brought forward by Councilwoman Carol Boigon, the proclamation aims to encourage Denver voters to say “no” to the controversial ballot questions.
Proposition 101, Amendment 60 and Amendment 61 would lower taxes by limiting government from spending and taxing, especially in the areas of vehicles, telecommunication, income, property and government borrowing.
But the lower taxes would come at a significant expense to government, say critics. In Denver, bond initiatives such as Better Denver infrastructure projects could come to a halt, bonding at Denver International Airport would come to an end, and the city would generally be unable to seek outside financing, to name a few concerns, says Boigon.
“The combination of action will put a city and county like Denver out of business,” said Boigon. “We will not be able to take care of our citizens, or our people.”
Proposition 101 would reduce vehicle ownership taxes over four years; end taxes on vehicle rentals and leases; phase in over four years a $10,000 vehicle sales price tax exemption; set total yearly registration, license and title fees at $10 per vehicle; lower the state income tax rate from 4.63 percent to 4.5 percent, then phase in a further reduction to 3.5 percent; and end taxes on telecommunication services, except for 9-1-1.
Amendment 60 would reverse a measure that froze property tax mill levies in local school districts, and also reverse the effects of the 2005 voter-approved Referendum C, which approved a five-year reprieve from TABOR refund requirements to be spent on education, health care and transportation. The Ref C time-out ended at the end of last month.
Amendment 61 would prohibit government from incurring any debt without voter approval, and then reduce tax rates after borrowing is fully repaid.
The city estimates that Prop 101 alone would cost it $62.2 million in revenue if the proposal passes. The lost revenue would represent about 7.3 percent of the city’s total general fund revenues.
Amendment 60 would require Denver to waive limits on property tax collection by Jan. 1, 2011, instead of by 2014, according to city budget officials. A 2007 state law froze mill-levy rates in school districts that had already voted to waive the limits.
Budget officials said Amendment 60 would negatively impact how the city recovers revenue streams and funds. The proposal could result in DIA needing to increase fees, according to budget officials.
Critics in Denver are especially concerned about what impact the proposal would have on schools. School districts would need to phase out half their 2011 tax rates by 2020, and the state would need to backfill the revenue loss, City Council members heard at a General Government Committee meeting last month. State funding for schools has already been slashed by about 6 percent because of budgetary constraints.
Amendment 61 would affect Denver’s ability to borrow by redefining debt obligations, including certificates of participation and dedicated revenue bonds, City Council members also heard last month. Local government borrowing would be capped at 10 percent of the assessed taxable value of real property, excluding personal property, which would affect refinancing for the city, said Boigon. The city’s current borrowing cap is set at 25 percent.
The proposal requires a vote of the people for all borrowing, which would make it impossible for government to refinance, which would end the city’s ability to take advantage of best available rates, said Boigon.
DIA is presented as an example because the airport has approximately $5 billion in debt, but pursues anywhere from three to five refinancing transactions per year. Impeding the airport’s ability to refinance could affect its ability to borrow.
Proponents object to critics arguing that their initiatives would cripple government. Natalie Menten, a Lakewood resident who spearheaded a campaign to oppose a tax on grocery food in Lakewood and is acting as spokeswoman for the Colorado Tax Reforms campaign, said the initiatives would only slow government spending. She does not believe the measures would prevent Denver or the state from refinancing at a lower rate; moving forward on construction projects; or funding education, transportation, health care and other core public services.
Proponents are not surprised that Denver City Council has proposed a proclamation opposing their initiatives, arguing that “politicians don’t like tax limits.”
“Why are we not surprised that the foxes are protesting a limitation of visiting hours at the chicken coops?” quipped Menten in an e-mail response to the Denver Daily News.
The campaign has been mired in controversy, with anti-tax crusader Douglas Bruce ending up in the center of the drama. Bruce dodged dozens of attempts to subpoena him to testify as to what involvement he has with the campaign. Reports suggest that Bruce, author of the Taxpayer’s Bill of Rights, is the man behind the three proposals. He eventually agreed to testify before a grand jury after being threatened with a contempt hearing.
Bruce’s testimony is in connection with allegations that the Colorado Tax Reforms campaign violated campaign finance laws.
Menten took offense to the Bruce rumors, and to the allegations of campaign finance violations. She said the complaint was put forward by opponents because they “do not want to discuss the issues on their merits.”
“It was a kangaroo court and a publicity stunt, that did NOT involve our committee É” wrote Menten.
She said the same about the Bruce controversy.
“Seeking a boogeyman is a sign the opposition can’t defeat the issues on their merits,” said Menten.
The City Council proclamation opposing the three anti-tax proposals is expected to sail through City Council tonight with overwhelming approval.
“Truly, this is a measure that was designed by Mr. Douglas Bruce to put government out of business,” said Boigon. “And these three together would do it.”
