“Fork over the tax increases, or the government programs get reduced or 86’d!”
Full Disclosure: No one actually said this, but that’s the implied message from Arapahoe County to residents if they don’t approve two possible tax increases this November. One is a property tax hike (and a partial de-TABOR) and the other is a 0.25% boost in the county sales tax.
Here’s what the county actually said, right after proclaiming a “significant” budget shortfall come 2025: “We’re asking residents to consider either reducing or eliminating many essential County services or to consider a couple of alternative funding sources to sustain these services.”
The property tax boost would cost the owner of a $500,000 home an average of $13 a month. And the county sales tax increase of 0.25% would cost the average household $4.30 a month.
The path to a tax hike
Last year, Arapahoe County ran a poll to ask voters if they’d be open to a sales tax increase or reduction in their TABOR refund. Both issues garnered just under 50% support, so they were temporarily tabled. But the results were close enough that the county commissioners authorized another polling firm – Magellan Strategies from Louisville – to conduct another survey.
Commissioner Jeff Baker – the lone Republican – was reluctant to authorize another poll because of the cost, and not much time had passed since the last one. It was approved and the online survey ran from February 12-21, 2024 and completed by 2,875 registered voters. But this time the results were slightly more positive. The proposed 0.25% increase in county sales tax was favored by 55%, 36% were opposed and 9% had no opinion.
The proposed TABOR override would allow the county to retain and spend $75 million of over-collected property taxes, costing an average of $13/month or $156/year on a $500,000 home. This proposal garnered 50% of voters who said they would definitely or probably support; 41% said they would probably or definitely oppose, and 9% had no opinion.
While Baker expressed concerns about raising taxes while resident struggle with a rising cost of living, he also said he’s be onboard with a “small tax increase” with the following four conditions in place: 1) A citizen oversight committee, 2) A specific list of projects the funds will pay for, 3) A 10-year sunset provision and 4) Share back with the 13 towns and cities in Arapahoe County.
The survey also asked voters: “If you had to choose between the two ballot measures, which one would you prefer to vote on this November?”
42% were in favor of the de-TABOR property tax measure, 37% were for the 0.25% increase in county sales tax, and 21% had no opinion.
Commissioners will decide in August whether or not to refer one or both of these measures to voters. Although neither proposed tax increase received an overwhelming majority in the latest survey, the 4-1 Democrat majority on the commission means at least one, if not both, will likely appear on the November ballot.
Look at the spending
If neither one of these measures pass this November, the county claims it will need to cut $35 million just to get through the 2025 fiscal year, which among other things, “…likely mean a decrease in our economic development investments, which create upward mobility for our residents and growth opportunities for our local economy.”
The economic development “investments” include memberships in and financial support for organizations like the Aurora Chamber of Commerce and Aurora Economic Development Council, the I-70 Regional Economic Assistance Partnership (REAP), the Eastern Arapahoe County Economic Development Council and Eastern Colorado Small Business Development.
While these memberships and financial support may have good intentions, the questions need to be asked: Do these public/private groups or government do a better job to increase economic activity than the private sector alone? And can these organizations maintain operations with a lower budget?
Answer #1: It’s difficult to measure, and it depends on the sector of the economy you work in. But with the Internet, you can network with like-minded people anywhere around the world. I’m not sure these groups play as important a role in economic development as they used to.
Two more questions that dovetail with this answer: Why do taxpayers need to pay money to a county government, and have the government recycle those funds into other organizations? Is it really about “economic development” or a nice-sounding version of quid pro quo?
Answer #2: Yes. The Covid “pandemic” proved that companies can work virtually and don’t need as much office space or overhead as they thought. In other words, these will have to tighten their financial belts, just like households and businesses do during lean times.
A quick glance at the 2024 county budget shows the “big 3” categories where cuts will need to be made: salaries and wages (39.9%), services and other (32.3%) and benefits (11.3%) of $542 million in approved expenditures. Quick math shows that benefits are over 28% of salaries. For every $100,000 in salary, county employees receive over $28,000 in benefits. Those are quite generous, and appear to be Cadillac-type bennies with all the bells and whistles. Maybe the county should look to scale those back to more of a “basic Buick” type of benefits plan.
I’m not exactly sure what the other in “services and other” is. The naming of this category is an accounting red flag by itself. I think an accounting or consulting firm, or citizen’s review committee should take a very close look at every program and line item in this category. I have a hunch there’s a lot of financial “fat” that could be cut.
Taxpayer fatigue
The slowing economy, rising inflation and increased demand for county services may have put a strain on finances, but government policies and spending decisions have also played their part. Hard times require hard choices, and there’s no easy way out of this current fiscal condition. And I’m willing to bet these two tax increases (or “revenue enhancements”) won’t be the last we’ll see here – or anywhere else – in Colorado.
The modern-day Golden Geese (companies and individuals with wealth) won’t take the financial plucking forever, and households and business owners who are being ground by the dual millstones of taxes and inflation won’t quickly or easily fork over more of their hard-earned money. Every county and city that wants more money needs to keep this in mind before they float more ways to squeeze revenue from taxpayers. Elected officials had better give some darn good reasons why they need the extra cash. And even then it won’t be a guarantee they’ll get it.
Brian Ochsner is an Arapahoe County resident and marketing professional who follows trends in agriculture, economics and investment markets.
