RV

Colorado Springs City Council delays RV parking ban

Scott Weiser January 9, 2019

Ordinance to ban RV parking on all streets in Colorado Springs delayed until March over concerns of lack of a plan for dealing with people living long-term in recreational vehicles.

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Do you want the Broncos to win the Super Bowl?

Then you’d better hope Amendment 87, which brings back Colorado’s economy-strangling “graduated” income tax, loses at the ballot box this fall. Seriously.

Forget Republicans and Democrats. Forget tax policy. This is about Xs and Os, and whether Denver can afford the players who execute them and win a Super Bowl.

The Manning effect

Every successful business has star employees: rare talents without whom the enterprise simply doesn’t work. Same goes for an NFL franchise.

Every business has star employees the whole operation is built around. Sometimes that star is the chief executive. No Henry Ford, no assembly line, no affordable car. No Steve Jobs, no iPhone, foldable or otherwise. No Elon, and Teslas are just golf carts with better marketing.

But more often, the star isn’t the person running the place, it’s the person the CEO had the sense to hire. A smart CEO understands paying extraordinary people extraordinary salaries is sometimes the price of success.

Competent employees may be plentiful. Franchise-changing talent is not.

The chemist in the lab who sees the molecule nobody else does. The closer on the sales team. The reporter whose byline wins the Pulitzer. The performer who actually fills the arena.

Any company can hire a receptionist. Few can hire star employees. A smart CEO knows you pay that person absurdly well, because the alternative is watching him walk across the street or across the state border to your competitor.

Football works exactly the same way. A head coach’s most consequential decisions aren’t play calls, they’re personnel calls.

In 2012, the Broncos handed Peyton Manning roughly $20 million a year to be their star employee (adjusted for inflation, that’s pushing $40 million today). Did it work out? Ask the Lombardi Trophy sitting in the team’s front office.

Manning was worth every nickel.

The Amendment 87 pay cut

But like any CEO, a head coach doesn’t have infinite money. He’s stuck with a salary cap, competing against 31 other teams for the same shrinking pool of ridiculously overpaid talent.

Enter Amendment 87, which offers most of us a token tax cut while nearly doubling the rate on those evil, hated rich people we call Denver Broncos. If it passes this fall, every Bronco currently taxed at Colorado’s flat 4.4% starts paying 8.4%.

Football players take a lot of hits to the head, but their accountants don’t, and unlike our legislators, accountants (and even concussed football players) can do arithmetic. All else equal, a player has to earn 8.4% more to play in Denver than to play somewhere with no state income tax at all.

Any player who plays for the Miami Dolphins, Tampa Bay Buccaneers, Jacksonville Jaguars, Las Vegas Raiders, Tennessee Titans, Dallas Cowboys, Houston Texans or the Seattle Seahawks gets an instant 8.4% raise compared to playing for Denver under Amendment 87.

Run Peyton Manning’s numbers again: at $20 million a year, that 8.4% is $1.68 million a year , $8.4 million over a five-year deal. Double those figures to adjust for inflation, and you’re talking real money even by NFL standards.

Sure, plenty of things factor into where a star chemist, programmer, performer or quarterback decides to live and work. But an 8.4% pay cut isn’t a rounding error. It’s the kind of number that ends up circled on a napkin in some agent’s office come free agency.

Not that it matters, but it’s not just football teams competing for star talent. Every Colorado business is as well.

The relocation incentive

If Colorado wants to be a tech magnet for the upcoming quantum revolution, companies will be competing for quantum specialists. I don’t know how many of those you know, I don’t know any.

What goes for the quantum tech field and the football field goes for every industry.

A company can give those superstar employees an immediate 8.5% pay increase by relocating to a no-income-tax state. That’s why so many companies are relocating out of California, Illinois, New York and now Colorado for places like Florida and Texas. Just ask the well-paid people who used to work at Palantir in Denver.

Amendment 87 makes the Denver Broncos’ problem every business’s problem.

But let’s keep it to football.

The ballot language for Amendment 87 should actually read: “Shall the Denver Broncos have 8.4% less money to spend on player talent than other teams in the NFL?”

Jon Caldara is president of Independence Institute, a free market think tank in Denver.

Amendment 87: How the Broncos play into Colorado’s tax fight

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