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On Nov. 2, Colorado voters will vote on constitutional Amendments 60 and 61 and Proposition 101, which will have significant financial impacts on state and local governments if passed. This article is intended to briefly outline the anticipated impacts on Rio Blanco County government. The towns of Meeker and Rangely, the school districts, and each special taxing district (hospitals, fire protection, etc.) would have impacts beyond those stated in this article.
Amendment 60 would change the Taxpayer Bill of Rights (TABOR) to cancel any property tax increase approved by voters at the county level after 1992, and to restore state revenue limits required by TABOR. Rio Blanco County voted to approve increases in total property tax revenue, based on valuation adjustments, after Jan. 1, 1995 – as long as the mill levy did not increase without voter approval (commonly referred to as “de-Brucing”). Rio Blanco’s mill levy remains the same today as it was at that time. The county’s current mill levy of 9.050 is the sixth lowest in the state out of 64 counties.
Amendment 60 would require that property tax revenue limits be recalculated. To the extent current revenues exceed TABOR limits, the mill levy would have to be reduced. It is estimated the county mill levy would have to be dropped to 3.363. The lowest mill levy for any county in the state is currently 5.677. Restoring TABOR limits is expected to cause an immediate $6.6 million decrease in the county’s property tax revenue. Annual tax collections would remain at that level until county taxpayers approved new increases. Since TABOR requires tax questions be voted on in even-numbered years, the earliest such an election could occur would be 2012. Future increases would expire every four years, requiring taxpayers to re-approve annual tax collections by election.
Proposition 101 deals with vehicle licensing and includes several tax and fee cuts. If passed, county revenues from specific ownership tax would decrease $384,000 annually, sales and use tax would decrease $468,000 per year, and Highway Users Transportation Funds distributed to Rio Blanco County are expected to decrease 38 percent or $1 million annually. The total impact of Proposition 101 on Rio Blanco County government is estimated at $1.5 million in 2011 and $1.9 million by the end of the phase-in period.
If both Proposition 101 and Amendment 60 passed, the expected immediate impact to Rio Blanco County government would be a revenue reduction of $8.1 million. This amount represents 39 percent of annual county operating expenditures. The sheriff’s office and the road and bridge department currently comprise 54 percent of the county’s total operating expenditures. These two areas would be forced to cut large portions of their budgets and would not be able to avoid reductions in the services they provide. The county would cut costs in other areas as well, and reduce or eliminate services not mandated by the state or federal government to balance its budget.
Proposition 101 would cut income tax rates. Amendment 60 shifts half of K-12 school funding from property tax to state aid. Funds being passed through the state to counties have decreased in recent years. The trickle down impacts from a reduction in state revenues would be felt at the county level. No estimate of this impact can be made at this time. Rio Blanco County would not be able to rely on revenues the state might need to balance its budget.
Amendment 61 limits debt to 10 percent of assessed valuation on real property. The county does not have any outstanding debt at this time, thus the limit would only come into play for new borrowings. Such borrowings would have to be repaid in 10 years or less, causing annual payments to be much higher. Amendment 61 eliminates the opportunity for governments to refinance debt even when interest rates are falling.
The above estimates will be used by the county to alter the course of financial planning if any of these measures pass. If you would like more details about the county’s calculation of these impacts, contact the budget director at 878-9446. You may also contact the county commissioners at 878-9430.