NO on Question 1A – 2.5 Mill Levy Increase on Property Taxes

This November (actually, your ballot will be arriving in the mail probably next week), the first question on the ballot (legally required to appear first), will be a 2.5 mill levy increase on your property taxes. A forever tax, that is titled, “Capital Maintenance Mill Levy,” that will be utilized for, “…the sole purpose of funding the restoration, rehabilitation, refurbishment, or replacement of the city’s capital infrastructures, including parks, public works, buildings, and other pubic facilities and improvements…”

A prior entry provides a reasonable expectation of how much property taxes will rise, taking into account several factors, including the 2.5 mill levy increase:

Dennis Gallagher, Denver’s Auditor, took pains to study both the proposed 2.5 mill levy increase proposed by Hickenlooper, and coupled that with the back door machinations of Governor Bill Ritter’s tax and spend Democratically controlled State Legislature. The State Legislature passed the School Finance Act that froze property tax rates–in opposition to a 1982 constitutional amendment–thus negating the requisites of the constitutional amendment that provided when residential property values rose, mill levies would fall; what was supposed to be an effort to limit the tax burden on property owners by the state.

So, the truth or the more accurate estimate of how much property taxes will increase–taking into account both the proposed 2.5 mill increase and the cost of the $550 million bond package–both from the Hick–and Ritter’s back door property tax increase (which, incidentally, only affects property that rises in value, like DENVER), looks more like about $100 per year: $36.54 for the state increase; $50.75 for the city mill levy increase and $12.52 for the bond package. (These figures from Chris Barge’s piece in the September 11th, edition of the Rocky Mountain News.)

I know, doesn’t sound like a whole lot of money to most. For some, it will be a burden.

The problem with the whole mess is, for me, just exactly what all this tax and spend in going to provide and what necessarily it won’t provide. What will still linger out there, undone, neglected, while big bucks are spent on projects that, in the Hick’s view, will make Denver a “great city.”

Additionally, if you hadn’t noticed, Denver Water will raise rates next year. The rate increase will, on average, mean an additional $13 for taxpayers in Denver. Parking ticket fines are also going up, from $20 to $25.

As an aside, a piece by Jennifer Brown, Denver Post, with regard to Ritter’s tax freeze–described above–notes: “The freeze will mean an additional $32.7 million generated by Denver property taxes, up $15.6 million from an April estimate.

“But the increase in local funding does not correlate to additional funding for Denver Public Schools. The extra $32.7 million in local property taxes means $32.7 million less [for Denver] from the state next year. [Admittedly, I don’t really have a mental handle on the $32.7 million less for Denver next year. Why? What does that mean? With the sorry state of the Denver Public School system; with the additional burden on Denver taxpayers for education to the tune of $32.7 million, why is DPS not a major recipient of the same? Don’t know.]

“The state money instead will go into the Colorado education fund to support statewide preschool slots and other programs.” [Okay. So, Paonia will derive benefit from the immense increased tax burden on Denver’s taxpayers, but Denver won’t? I don’t get it.]

Okay. So, the total proposed budget for Denver in 2008, is $1.8 billion. $866.4 million of that amount is the city’s General Fund. The General Fund is the bucket from which “essential” city services are funded. Far be it from me to suggest that the definition of “essential” has been significantly skewed by a succession of Democratic “altruistic” mayors, who have embraced costly–what some may call–quixotic crusades. Let’s just agree that the word “essential” means different things to different folks. It’s also important to note that some “essential” city services are funded through enterprise funds (those agencies that generate their own revenue) and, typically, don’t dip into the General Fund.

So, bottom line, the General Fund budget for 2008 is proposed to be $866.5 million for 2008. Of that number, almost half, $415.7 million goes to public safety–Fire, Police, Sheriff, Civil Service Commission, District Attorney, County Courts, Emergency Management, Safe Cities. Public Works will get $91.67 million (about 10%) of that pie; Parks and Recreation will get $49.59 million (about 6%). It’s interesting to note Denver’s largest source of General Fund revenue comes from sales and use taxes ($436 million), which make-up slightly over half the proposed 2008 budget, and, coincidentally, mirrors almost exactly the budget for public safety.

It may be obvious–I hope it is–why the city’s infrastructure is crumbling. Legacy projects, altruistic mayoral crusades, enormous influx of New Urbanist communities/developments embraced by our developer-loving mayor (those communities and developments surely taxing existing infrastructure and requiring new infrastructure), and, AND the gargantuan expenditures for public safety leave little crumbs for those essential city services that most of us receive the benefit of, are aware of and which can be most aptly described as public works and parks.

The enormous cost of public safety is, for all intents and purposes, something politicians rarely question. And, looking at cities similar in size to Denver, the costs for public safety in Denver pretty much reflect the national trend. I suppose that’s a sad commentary on life in America.

So, we’re left with those paltry crumbs for public works and parks.

What bothers me most about the 2.5 mill levy increase for, as I said, “…the sole purpose of funding the restoration, rehabilitation, refurbishment, or replacement of the city’s capital infrastructures, including parks, public works, buildings, and other pubic facilities and improvements…” is that we have been presented with eight bond issues which seem to, at first look, accomplish what the mill levy increase is touted to accomplish; and, at second look, actually increases the city’s infrastructure, thus further burdening taxpayers with the maintenance of the same. (I know, I know. The “intent” of the mill levy increase on property taxes, as espoused by the Infrastructure Priorities Task Force and the Hick, is simply to fix crumbling infrastructure. However, nowhere have I seen a proposed line item breakdown of how that additional $27 million will be spent. Additionally, what bothers me about the wording of the mill levy increase are the words, “replacement,” and “other public facilities and improvements.” That’s a great big door left open, once again, for the city mamas and papas–certainly the Hick, himself–to interpret and define how and where that money will be spent.)

A great deal of what the mill levy increase is touted to be utilized for is embedded within the eight proposed bond issues that will appear on the ballot. Rather than provide a detailed explication of the eight bond issues, here’s a link where you can take a look yourself. (Note: Go to the UPPERCASE print.) If you take a look at the language describing these bond issues you will note the words: “deferred maintenance, renovation, reconstruction, replacement, repair, improvements, rehabilitation.” Probably the most telling document you can take a look at is the companion ordinance that details line item projects embedded within the eight bond issues. Here’s the link.

Okay. Hope you’re still with me.

I understand that the proposed bond issues can be viewed as a “one time” (at least, a “one time” in ten or so years) endeavor. The mill levy increase is, of course, a forever increase unless sometime in the future it’s repealed. The mill levy increase represents a 44% rise in the total property tax infusion into the General Fund; a 3% increase to the total General Fund pot.

Consider, if you will, that if all or most of the proposed bond issues are passed, there will be–probably for a number of years–an additional $27 million “discretionary” source of funds–given the non-specific, not detailed purpose for the use of the funds, coupled with the specific, detailed purposes of the bond issues–which the Hick and crew can utilize for their “altruistic” endeavors which, forgive me, benefit the few rather than the whole. Indeed, given, once again, the mill levy increase language, “restoration, rehabilitation, refurbishment, or replacement of the city’s capital infrastructures, including parks, public works, buildings, and other pubic facilities and improvements…” I do not believe it is beyond the realm of possibility that we’ll see the Hick spend big bucks on projects that are not essential city services, or essential city infrastructure.

To tie this up, the maintenance of essential city infrastructure is unquestionably a responsibility of city government. Curiously, the word “maintenance” does not appear in the language for the mill levy increase ballot question, 1A, except in the title. Why not? And, there’s the rub. Additionally, the mill levy increase is tied to property value assessments. Assessments go up, the tax bill goes up. Those on a fixed income–no matter how paltry some may believe the additional property taxes to be–will find themselves hard-pressed to find the wherewithal to pay that bill.

The eight bond issue proposals provide the specter of a frenzy of infrastructure deferred maintenance, renovation, reconstruction, replacement, repair, improvements, rehabilitation. For what, then, will the 2.5 mill levy increase be utilized?

There may be a need in the future for a mill levy increase that specifically provides for the MAINTENANCE of city infrastructure. But, as I said, 1A does not specifically address “maintenance.”

I do believe 1A is ill-conceived, ill-advised.

Enough said.

P.S. Comes a revealing, if not ominous warning, from Bill Vidal, Manager of Public Works, with regard to the proposed bond issue for what is generally called, “Streets, transportation, public works.” Speaking directly to the very specific projects itemized in the bond proposal (1D), Mister Vidal said, “I can’t guarantee the scope of some of these projects won’t change…” Warning, says I, from one who knows the machinations behind changes of scope for specific city projects. Yes, what Vidal is saying is that if you think you’re voting for pothole repairs, don’t be surprised if the “scope” of the same is enlarged or simply modified to include construction of a day spa in a homeless shelter. With undefined projects slated to be funded with the mill levy increase, and, therefore, no specific scope of work defined… Well, beware. Suffice it to say, the Hick undoubtedly dreams of scopes of work that will consume the $27 million in additional property taxes. Hick’s dreams concern me. Or, hadn’t you guessed…

P.P.S. Denver Post columnist, Bob Ewegen, puts a happy face this morning on the issue of what, eventually, the $27 million generated from a property tax increase will be utilized for. “I have no doubt that if voters approve the extra funds for maintenance, they’ll be spent on exactly that on Hickenlooper’s watch.” Well, Bob, as you note, “…this is a short version of a highly technical discussion…” Bob, my boy, either you haven’t read the language specific to question 1A, or you’ve just simply chosen to ignore it. Deadlines and all that, huh? Tiresome as it is, let me just repeat that language, “… “restoration, rehabilitation, refurbishment, or replacement of the city’s capital infrastructures, including parks, public works, buildings, and other pubic facilities and improvements…” Now, as I’ve noted, the Hick and company may declare–as did Claude Fumilia, the city’s CFO–“The money is restricted money. It is very clear in the ordinance this is capital maintenance money. It will be tracked and reported and kept in a separate account structure.” But, see, Bob, the problem is the door is still left wide open for the Hick to define what “capital maintenance” will be accomplished with this money. “Capital maintenance,” encompasses a whole slew of things, not to mention the specter of infusing these funds into “…public facilities and improvements…” Unlike you, Bob, I’m not that confident that the Hick is any different from the succession of Democratic mayors, from Currigan to Webb. Like you, I’ve known them all, and, dang, one thing after another just seems to get in the way of not sticking one’s finger in the honey pot; of not defining “capital maintenance” to exclude each of those mayor’s eye on their particular legacy.

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4 Responses to NO on Question 1A – 2.5 Mill Levy Increase on Property Taxes

  1. Blarney says:

    Good analysis. I am surprised at the complacent attitude of the “yes” campaign. Press has been overwhelmingly negative about the tax hikes but there has been no real answer from Hick’s people, just a simplistic television ad.

    “Fix the house” metaphor is fine but too abstract. Hick needs to SHOW us Denver’s NEED — what will be gained for DENVER? It looks like he wants us to pay to fix some stranger’s house.

    With Boettcher on the list, voters have reason to suspect that this tax package is not what Denver NEEDS — it’s what Hick WANTS.

    A listing came out today from the city treasurer showing names and addresses of those who have not paid property taxes. How many of Hick’s rich developer buddies are on that list?

  2. georgeindenver says:

    Thanks, Blarney. It occurs to me–reading your comment–that the sum total of my views on 1A could have been adequately summed-up with: “Before we say, fix it, shouldn’t we know what exactly it is they’re going to fix.”

  3. justguessin says:

    George,

    re: “The state money instead will go into the Colorado education fund to support statewide preschool slots and other programs.” [Okay. So, Paonia will derive benefit from the immense increased tax burden on Denver’s taxpayers, but Denver won’t? I don’t get it.]

    I’m guessing here but maybe this could be it….

    The statewide preschool money goes to preschoolers in need. Denver passed that silly preschool tax so now the state will look at Denver and see that the need isn’t there because the need is being mostly satisfied. Now, the state pot of dough can go to other municipalities that have larger unmet preschool needs.

    I’m not sure if this is accurate. Just Guessin’

  4. georgeindenver says:

    You’re probably right, justguess. Yes, that referred question 1A (another 1A) to raise sales tax by .12 percent, bringing in about $12 million annually for pre-school programs, probably has something to do with the state determining Denver will be cut out of the $37 million pursuant to the property tax freeze. Go figure! I guess we shot ourselves in the foot with that one. The details of that earlier 1A are here:
    http://georgeindenver.blogspot.com/2006/10/no-on-referred-question-1a-denver.html

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