The posting by Lisa Crockett on the CPN website and reprinted in Castle Pines Connection, "City Asks Voters to Consider Re-worded Ballot Questions," emphatically states seven times that the CPN ballot issues will result in "no increase in property taxes!"
The article attempts to portray the new tax measures as simply technical corrections. Voters should be aware that ballot questions 2D and 2E potentially extend current taxes beyond their current expiration. As such, residents will spend more tax dollars in the future to fund city services. That, my friends is a new and additional tax and the first line of the Ballot Question tells you so.
A copy of the article follows. I have added my comments and corrections in red.
City Asks Voters to Reconsider Re-worded Ballot Question
by Lisa Crockett
When residents of Castle Pines North (CPN) voted last November to incorporate, they also overwhelmingly (68% for, 32% against) passed three tax questions – one sales tax and two property taxes. Each of the property tax questions on the ballot last year simply transferred existing taxes to the new city. As a result, CPN became a city and there was no increase in property tax. The 2007 ballot questions did not simply transfer existing taxes. Ballot Question 2E was devised to allow the City to implement a new permanent property tax if the CPN Metro District would lower their mill levy under the notion that the CPN Metro District had excess revenues in their operating budget.
Now, the City of CPN is asking voters to approve a change to correct some technical issues in the original ballot question from November 2007. According to the city, the re-wording of Question 2E from last year will not increase taxes to CPN homeowners. City officials say it involves two technical corrections to the previous tax question related to the transfer of up to 19 mills from the CPN Metro District to the city. The first “technical issue” arose when City officials discovered no revenue could be transferred from the District’s operating mill levy without impairing the bonding capacity of the District. The other “technical issue” was that the Election Commission mandated that any integration of the mill levies leave the community’s renewable water efforts intact. The Commission decided to limit use of the transferred money to water and sanitation services.
“As the new city has come to life, elected city officials have worked to implement the tax questions under the Colorado taxation system,” said CPN Treasurer Doug Gilbert. “Through the implementation process, several issues with the wording of Question 2E – which appeared on the last election’s ballot – as passed by the voters have come to light. As originally approved, Question 2E allows transfer of up to 19 mills from the CPN Metro District operating fund to the city to be used only for water and sanitation.” The limitation on water and sanitation was a safeguard implemented by the Election Commission to prevent the City from redirecting tax revenues intended for renewable water to general city services.
The original text of Question 2E was drafted by the CPN Election Commission in 2007 with the help of attorneys for the incorporation effort.
During the past few months, representatives of the city and the two Metro Districts (CPN Metro District and the Hidden Pointe Metro District) have been in discussions regarding the mechanics of sharing all or part of the 19 mills that was part of the original ballot Question 2E from 2007. According to Gilbert, sharing of funds between the city and the Metro District would allow for lower cost of government through integrated public services with no increase in property taxes. The City’s proposed budget for 2009 includes $2,479,000 of new taxes and $465,000 in fees, most of which go to pay for consultants and attorneys. The City plans to fund these new expenditures with the existing sales tax and a new 9.5 mill property tax that permanently extends our property tax rate in the future.
“Through the better understanding provided by the collaboration of the city and the Metro Districts, it has become apparent that the original Question 2E from last year was too narrowly written,” said Gilbert. It may be too narrow for the City Treasurer, but for citizens concerned about runaway taxation and future water supplies, Question 2E held future city officials accountable.
The CPN Metro District does not want to transfer mills that would reduce its operating fund to the city, but suggested the possibility of transferring some of the 24 mills from its debt repayment program without impacting its ability to meet all of its current debt obligations. According to Gilbert, the CPN Metro District has asked for more flexibility in how the transfer mechanism was structured. Gilbert says all of the safeguards of the original ballot question Question 2E remain. “It is simply a discussion of how best to structure revenue-sharing,” Gilbert said. However, the Metro District has serious concerns about this approach. See the September 22 letter from Metro District attorney John Hayes to City Attorney Smith. The letter is posted at http://www.cpnhomeowners.blogspot.com/ Without the City’s revenue-sharing initiative, residents could expect a lower tax rate to come into effect when the first of the District’s bonds are paid off in 2013.
“This is a critical issue to our community, and the District Board is looking at it carefully before taking any position,” said CPN Metro District Board President Bill Santos. “Ever since the CPN bankruptcy, [which occurred in the early 1980s], the Metro District has worked diligently to develop strong financials and reduce long-term debt. We have to balance the importance of helping to fund city operations with the importance of creating a renewable water solution. Working with the city to fund operations only makes sense, in my mind, if it can be done in a way that does not impact our ability to finance our water solution, which is a fundamental responsibility of the Metro District.”
According to Gilbert, the Metro District and other city interests should work together, not against each other.
“The future of CPN is not only an issue of renewable water.” said Gilbert. “Instead, the city must achieve a viable economy through the tools of a new city and renewable water. If renewable water were enough, Sheridan, Colorado, would be a prime example of a robust economy. Despite having renewable water, a place like Sheridan suffers a blighted economy because of lack of economic development. We must achieve both goals through integration of the city and Metro District services and finances.”
In order to correct the original language of last year’s ballot question 2E, the City Council has referred two tax questions for the November 2008 ballot. The first question, 2D, is a correction to last year’s ballot question and would allow the city to take over a mill levy equal to any reduction in mill levy by the CPN Metro District to be used for general purposes. It is not an increase in property taxes. The new ballot questions are not “corrections.” They are newly proposed laws that expand the powers and funding sources of the City far beyond what was passed in 2007.
The second question on the November 2008 ballot, 2E, would allow the city to collect, retain and spend those property taxes (mill levy) that would be relinquished by the Metro District, and various other taxes such as park fees, water tap fees, facility fees, service charges, inspection charges, administrative charges and grants, etc. This question also is not an increase in property taxes. Evidently, it is not a tax if you call it a fee or a charge. Ballot proponents like the CPN Master Association, city officials and writer Lisa Crockett must feel that if you say “it is not an increase in property taxes” enough times, some people will begin to believe it.
According to city officials, the language of the questions was developed with the input and agreement of the city and the CPN Metro District, as well as bond financing attorneys. “The language changes are seen as very important to allow integrated public services and to ensure that renewable water funds are available,” said Mayor Maureen Shul.
City officials say these ballot questions will NOT increase property taxes (mill levys.) The maximum mill levy remains the same, as does the requirement that the CPN Metro District first reduce its mill assessment before the City can assess the equivalent or lesser amount of mills. The amount of the mill levy does not change, but the time over which it is implemented is extended indefinitely. If residents vote to extend a tax that would otherwise expire, they will spend more dollars on taxes. That is a tax increase!
“The wording of the new questions clearly indicates that there is absolutely no increase in the tax rate,” said Shul. The mayor chooses to focus on the tax rate. She knows quite well that if voters understand that there an increase in tax duration, they may choose to vote against 2D and 2E.
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9 comments:
Thanks - this answered the questions I had after reading the blue book this weekend.
-Catherine
Too bad your interpretation does not agree with the Colorado Supreme Court, which is clear that Questions 2D and 2E are NOT tax increases. Doug Bruce tried to convince the Court of your interpretation and was told by that he was legally off base and wrong. After that he went on to kick reporters!
The Colorado Supreme Court has never rendered an opinion on 2D or 2E.
The 2006 case you refer to, "Bruce v. Colorado Springs," dealt with a different set of facts. The court attempted to resolve whether a “tax extension” is a “tax increase” in the context of TABOR.
In that case the court found that the issue did not "substantively change the existing sales and use tax OR ITS PROPOSED USE OF THE REVENUE." While the extension lengthened the time period of the tax, it directed the tax revenue to the SAME EXPENDITURES approved by the voters in the original ballot proposal.
The dissenting opinion of Justice Coats noted, "I believe the plain and ordinary meaning of the term “tax increase,” in context, must include the “extension of an expiring tax,” and that the clear intent of TABOR is not only to require voter approval for such an extension but also to
PROVIDE THE VOTERS SUFFICIENT INFORMATION TO MAKE A RATIONAL CHOICE."
The tax measure proposed here in CPN anticipates a new tax levied by the City with a corresponding offset from an expiring tax from the Metro District. The ballot question in Colorado Springs clearly noted that the issue involved a "tax extension" while the CPN ballot language does not. I believe the Colorado Supreme Court could reach an entirtely different conclusion under these circumstances.
Wow, Jeff. That negative anonymous comment looks like it might have come from someone like a City Treasurer who's trying to defend himself.
When a tax that's supposed to expire soon gets reincarnated into a never-ending tax for a completely different purpose, I call that a TAX INCREASE.
Ranting and raving about a tax increase when there is not tax increase. Hum? Seems that's why CPN does not have a rec center. What's next, we forget about repairing streets?
The logic you use to say this is a tax increase bases itself on whether there is a continuation of a tax. Sure seems like an extension to me.
BTW dissenting opinions are not law. The majority of the court said that questions like 2D ad 2E are NOT tax increases. That is the law of the land. Is that not binding on this group?
Yes, dissenting opinions are not law. But they are the basis for measuring the commitment of a court's opinion to a particular view. The dissenting opinion may rise to majority status with the election of new judges or the application of the same principles to a new set of facts.
The majority of the Court in the Colorado Springs case ruled on the facts of that case alone. Certainly, you can argue that the same rational should be applied here in CPN. However, 2D and 2E present an entirely different set of facts and courts may interpret the constitutional requirements differently.
Finally, the law of the land applies to all who live under its jurisdiction. I write for myself and my readers, not a group. My opinions are mine alone, not those of any organization, PAC, or government entity.
Ronald Reagan said, "Don't be afraid to see what you see." Citizens of CPN should heed his advice.
What disturbs me is the apparent lack of transparency by our newly elected government. This is a tax increase. Period.
Why not present the facts about the tax and let the resident decide?
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