JEFFERSON COUNTY–Jefferson County, Colorado’s fourth-most populos county, with more than 580,000 residents is asking voters to override the revenue and spending constraints of the Taxpayer Bill of Rights (TABOR) with a November ballot issue. The County wants to keep and spend excess tax revenues it collects rather than refunding it to taxpayers.
This comes at the same time that the State of Colorado is making the same kind of request, in perpetuity, for all excess revenues it collects with Proposition CC.
Jefferson County Commissioners voted unanimously on July 23 to place the question on the ballot in response to county staff claims that without it the county will suffer a $16 million budget shortfall in 2020.
“TABOR limits the amount of tax revenue that Jeffco can keep,” says a post on the County’s website news section. “While demand for services grows, the tax revenue that would pay for the resulting services is limited.”
The ballot measure would allow the county to keep $16.1 million in 2020 and keep all additional excess revenue between 2020 and 2026.
Starting in 2027 the measure would allow the County to keep, spend or place in reserve “an amount of county revenue that exceeds current spending and revenue limitations but is no greater than the excess local revenues cap…”
The “excess local revenues cap” is defined in the measure as “an amount that is equal to the highest total county revenues for a fiscal year from the period of the 2021 fiscal year through the 2026 fiscal year, adjusted each subsequent fiscal year for inflation, the percentage change in local growth, the qualification or disqualification of enterprises and debt service changes as provided in paragraph 7 below.”
The ballot measure goes on to exempt all non-property tax revenues collected after 2027 from TABOR, allowing the County to keep it in perpetuity.
In other words, in 2027 the County would set a maximum excess revenue cap by including both property tax, sales tax and other non-property tax revenues at the highest amount collected during the five-year period between 2021 and 2026, plus some adjustments.
The County then exempts sales and other non-property tax revenues from that revenue cap, effectively boosting the amount it can keep by retaining both the capped property tax revenues and whatever uncapped tax revenues it manages to collect.
According to the County’s website, actual revenues so far for 2019 through July 29 exceed expenses by more than $110 million, or 32%. So, for example, if at the end of 2020 that kind of surplus was collected thanks to a booming economy, that would be the baseline “excess local revenues cap” into the future.
TABOR limits annual spending increases to the percentage of inflation for the previous year plus the percentage of annual growth, or 5.5% maximum, whichever is smaller.
The County’s Comprehensive Annual Financial Report (CAFR) ending Dec. 31, 2018 pegged inflation at 3.1% and local growth at 0.91%, placing the maximum allowable increase in spending for 2019 at 4.01%.
The report says the County will be refunding $6.2 million in 2019 through a temporary mill levy adjustment for over-collection in 2018.
Jefferson County has tried over the years not to violate TABOR by setting temporary mill levy reductions to refund any over-collections and to avoid over-collecting in the first place. The County has tried twice before to pass a broad TABOR spending and revenue exemption measure, first in 1994 and again in 2000. Voters turned it down both times.
But county taxpayers aren’t dogmatic about denying tax increases.
Since 1994 voters have approved at least four measures:
- In 1998 they passed a debt increase and spending limit waiver of $160 million for open space that passed with 70% approval.
- In 2001, they approved an extension of a 0.5% sales tax in Southeast Jefferson County to pay for transportation projects that passed with 76% approval.
- In 2003 they approved a 0.575 mill levy increase and spending waiver by 62% for programs for “persons with mental retardation, including developmentally disabled.”
- Finally, they approved a 5% excise tax on marijuana in 2016 with 62% approval.
The issue will be decided by Jefferson County voters on the Nov. 5 ballot.