LONGMONT — Despite a public outcry to rein in rapidly rising property taxes and a Colorado inflation rate that stubbornly outpaces much of the rest of the country, the Longmont City Council is asking voters to give them over $40 million a year more for a variety of purposes including a new library, as well as new arts and recreational centers.
All totaled the city has three separate tax increases on the ballot, asking for an additional 7.68 mills worth of property tax increases as well as new sales taxes for what some see as “niceties” during a time of economic uncertainty.
The Longmont Area Chamber of Commerce opposes all three on the grounds of already rising property tax increases and a challenging environment for businesses.
“We are in a difficult time for many of our business owners and residents,” the Chamber said on its website. “While the economy has certainly improved since the pandemic, many of our businesses and residents are hurting more now than during the pandemic due to labor shortages, rising rents, inflation, inventory challenges, and more.”
According to a story in the Longmont Leader, home values in Boulder County (where Longmont is located) spiked this assessment cycle, which ended June 30, 2022. So while home prices may be down now, they were up when homes were assessed for taxes. The median sales price for a single-family home in Boulder County was $940,000 in June 2022, yet, according to the Colorado Association of Realtors, that same house is now worth $842,500, the leader reported.
That June 2022 figure, nearly $100,000 more, is what property taxes will be based on.
If all three measures were to pass, the impact on a $565,000 home in Longmont would be about $300 extra a year, not including the .35 of one percent total increase to sales taxes.
The Chamber also singles out the statewide ballot measure, Proposition HH, as a part of their opposition. “With property taxes going up considerably, which will impact leases and rents, Proposition HH promises to lower property taxes, but it also reduces TABOR refunds over time. We of course, do not know yet how voters will decide on HH, giving yet still more unknowns for our businesses.”
The tax asks
Ballot Issue 3C would raise property taxes by 1 mill and raise an estimated $7.4 million in the first year for the construction of a new library. The ballot language does allow for the mill increase to be removed at any time “up to 20 years,” suggesting when the city has raised enough money to pay off the bonds on the new construction, it would remove the mill from tax bills. However, the ballot issue also de-TABORs the revenue raised for the following years in the same question, which would allow the city to keep all money raised above what is needed for the construction.
Additionally, 3C also increases the current city sales and use tax indefinitely by .15 of one percent for the operation and maintenance of all city libraries.
“The importance of our library to our community cannot be overstated. The building is often the most visited city building in Longmont,” the Chamber said. “However, after careful consideration, from our Board and Public Policy Committee members, the Chamber is opposed to 3C. … Our concern (is) about the impact of rising property taxes, especially during uncertain times. While we acknowledge the value of investing in a new branch library and supporting the operation and maintenance of all city libraries, we believe that the current time is not the right time to place additional financial burdens on Longmont residents and businesses.”
Ballot Issue 3D would raise property taxes by 1.9 mills, also for “not more than 20 years,” and raise an estimated $12.5 million the first year to build a new arts and entertainment center. The catch with 3D, however, is the city says it won’t begin collecting the new mill until “$35 million in private funding has been made available to the city.”
There is also no initial cost estimate for the building, and with an unknown date for beginning construction, the cost of inflation could drastically change what voters believe they are voting on versus what they actually get in the end, a concern raised by Councilman Tim Waters during an Aug. 8 meeting. Although Waters said he had concerns about inflation and the unknown, he still voted to send the issue to the voters.
“People are going to be disappointed,” Waters said. “It is not going to pay for what we envision now. it just sets it up for disappointment,” he said. “They are assuming they are going to get one thing, and it’s just not going to buy what they thought.”
Waters reconciled his concern by saying future councils could always augment the differences by using creative financing mechanisms such as tax increment financing (TIF), special districts, and certificates of participation (COPs), all of which put more debt on taxpayers while circumventing voter approval under the Taxpayer’s Bill of Rights (TABOR).
Issue 3D would also raise sales and use taxes by .09 of one percent beginning six months before the projected completion date of the facility.
“The proposal is good for business, as it promotes tourism, drives foot traffic to local establishments, and strengthens the local economy,” the Chamber said. “However, these are uncertain times in our state and community in regards to property taxes, the outcome of Proposition HH, and the general health of the economy. For these reasons, we oppose 3D.”
Ballot Issue 3E would raise the property taxes by another 2.78 mills beginning in 2024, which would bring an estimated $20.7 million in new revenue the first year, and also “for not more than 20 years” to fund a recreation center at Dry Creek Community Park.
It also asks for an additional 2 mills that would be for not more than 3 years to fund a partnership with the YMCA in the construction of a second recreational facility that includes a pool and ice rink, along with an “affordable housing project.” Collection on those two mills would not begin until the YMCA secures a low-income housing tax credit, and there is no estimate of how much the mill increase would raise initially.
Also, as with 3C and 3D, there is a sales tax increase component of .11 of one percent beginning in January of 2025 to fund the Dry Creek Community Park recreation center.
During a presentation before the city council, an official with the city manager’s office said the ballot language was challenging because of all the unknowns.
“As we move out into the future, and the further out we move into the future, the harder it is to estimate,” he said about estimating high for the first year of collections. “We’re doing that to avoid putting the city into a situation where it would have to deal with TABOR refunds.”
The YMCA partnership was originally a separate ballot initiative, but Scott Conlin, who represents the community group Let’s Get Physical Longmont, encouraged the board to combine the two, which they did. He also asked the board to consider a bigger recreation center than proposed, such as increasing the pool from 6 lanes to 8-10 lanes, including a warm water exercise pool for seniors, and making an inside/outside component such as a splash pad for children.
“Alongside our concern with the other ballot questions that seek to raise taxes during challenging economic times, we see the potential ramifications of the proposed tax increases associated with this question. on the business community,” the Chamber said.
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