DENVER – If Denver Mayor Michael Hancock and the Denver Public School Board get their way, county taxpayers will see their tax bills rise next year. That’s because the Denver County Public School District will ask voters in November to approve more than a half-billion-dollar increase in taxes for new buildings, remodeling and administrative costs.
The city wants $105.6 million in commercial and residential property taxes in 2013, and ultimately $173.6 million in ensuing years or more.
City officials have asserted that Denver’s current total mill levy is ranked third from the bottom among 30 municipalities and counties in the metro area. If all is calculated and approved, Denver would skyrocket to nearly the top of the list.
If the ballot initiatives are approved, the ultimate annual tax hikes for the owner of a $225,000 home will be $254 and the owner of a median $1.1 million commercial property will be $5,552.
“We have to quit kicking the can down the road,” declared Hancock of the city’s dilemma in closing a $94 million budget deficit next year.
The city cut its budget by $10 million in efficiency savings, $5 million in employee pension and healthcare costs and $35 million in department spending.
Others argue the city hasn’t done due diligence in making cuts. The city’s average full time employee earns $89,000 a year compared to the private sector equivalent that receives $47,510 as reported by The Colorado Business Journal.
What do Denver taxpayers get? Some libraries will be open 48 hours a week instead of 32 hours, 100 police officers and firefighters will be added, at least 1,000 of new public safety vehicles will be purchased and street lanes will be repaved.
The trade off for businesses, which pay the lions share of taxes under the Gallagher Amendment passed by voters in 1982, is that they will not have pay taxes on equipment purchased over the next four years. That may translate to a cost saving for larger corporations, but not necessarily for smaller businesses that grow jobs and have tightened their belts in equipment expenditures during this recession.
Families get free recreation center access for 81,000 children enrolled in Denver Public Schools, daycare services for 3,000 children of low-income families, an increased number of after-school and summer programs for children, and free outdoor pool passes for public school students at Denver’s community pools.
Swimming pool passes are a great sales tool, but how does that translate for a family with school age children and a couple of preschoolers? A family pass now is $90 – two adults plus any number of kids. If the initiative is passed, a single or two-parent head of household with one school age child and a two-year-old toddler will get a free pass for the student, but will still have to pay $90 for the toddler and adult pass.
“Politicians never seem to get tired of threatening constituents and trying to shake voters down,” said Jeff Crank, state director of Americans for Prosperity. “How out of touch can some in the Denver government be who would take $100 out of your pocket to give a pool pass to your neighbor’s kids?”
There is nothing in the city’s swimming and recreation programs that would benefit singles or couples without children. The draft of the tax increase ballot initiative also gives no freebie pool passes or discounted programs to children who attend private schools or who are home schooled even though their parents pay property taxes. That may change.
If the measure doesn’t pass, Hancock said the city will not get the benefits of these children’s programs, road improvements and the increased police and firefighters.
“They shamelessly tell you they’re going to have to cut police and fire, knowing full well that they’ll find the money if they don’t get their way and voters turn down a tax increase,” said Crank, who added that like every other government entity Denver is capable of finding more cuts to balance its budget without threatening its citizens with less protections but chooses not to.
In a quest to help offset a $94 million shortfall in Denver’s budget next year, Hancock has asked the city council to place an initiative on the November ballot, asking voters approve a minimum four-year moratorium on TABOR that puts a cap on tax revenue and requires excess money to be refunded to taxpayers. TABOR, written by Douglas Bruce and approved by statewide voters in 1992, requires voter approval of government requests to retain excess revenue as well as proposed tax increases.
“People need to be aware that this is a significant tax increase,” said Penn Pfiffner, director of the Fiscal Policy Center for the Independence Institute. “Even though the tax rate on properties remains unchanged now, the amount of tax money collected will go up.”
Pfiffner said that Denver housing prices have not fared as poorly as other cities in the nation, but any increase in taxes will result in destabilizing home prices and potentially property values.
The city council will make a final decision on the ballot initiative to retain taxes on Aug. 13.