BY FREDA MIKLINGOVERNMENTAL REPORTER
On July 10, the 25-member citizens Long Range Planning Committee heard from Arapahoe County’s finance director, Janet Kennedy, and budget manager, Todd Weaver. Their presentation demonstrated how and why population growth in the county has not resulted in anywhere near sufficient revenue growth to meet the county’s capital needs and introduced the discussion about what other options might be available.
According to Kennedy and Weaver, between 2010 and 2018, the caseload at the state’s Department of Human Services increased by 107 percent from 58,644 to 121,558, while the population increased only 20 percent from 536,051 to 643,257 in the years from 2006 to 2017.
The county gets 60 percent of its general fund revenues from property tax. Despite the growth in population and addition of approximately 9,000 new parcels of property between 2006 and 2017, property tax revenues in the county have gone up by only 30 percent, resulting in general fund revenues increasing by a mere 18 percent. The is due in large part to the legal constraints on revenue resulting from unintended financial consequences of the 1982 Gallagher Amendment and the 1992 TABOR Amendment to the Colorado Constitution.
The Gallagher Amendment divides the state’s total property tax burden between residential and nonresidential property; 45% of the total amount of state property tax collected must come from residential property and 55% of the property tax collected must come from commercial property. These percentages from 1982 have been fixed permanently. Further, the Amendment mandates that the assessment rate for commercial property, which is responsible for 55% of the total state property tax burden, be fixed at 29%. The residential rate, on the other hand, is annually adjusted to hold the 45/55 split constant. As a result, the percentage of actual value on which residential property is taxed has gone down steadily through the years. According to Coloradoan.com, it was 7.96 percent from 2003 to 2017. For 2018 taxes payable in 2019, the rate dropped even further to 7.20 percent. For the county and all other entities relying on property tax, this reduces the amount on which their mill levies are applied, Kennedy and Weaver said. This results in fewer tax dollars for taxing authorities including Arapahoe County, making it increasingly difficult to buy the road maintenance equipment and other hard goods they need to run the government, whose prices have increased 29 percent over the past 12 years. That does not even take into account the county’s personnel cost, which is its largest expense. According to the 2019 Arapahoe County budget, its general fund cost for salaries and employee benefits has risen steadily from $106 million in 2016 to $123 million in 2019 and is projected to be $150 million in 2023.
The goal of the 1992 TABOR Amendment, another tax-limiting measure with negative unintended consequences, was to prevent the state legislature from implementing new taxes without voters’ approval. Not anticipated was the designed method by which its rules are applied, that results in government’s inability to “keep up with the growth in the cost of maintaining services—effectively creating an ongoing tax cut,” according to political reporter Anna Staver of the Denver Post on June 19, 2019.
Kennedy and Weaver presented general fund balance projections for the next ten years that demonstrate the county barely being able to keep up with its operating costs and necessary reserves, leaving no ability to pay the capital cost of a new jail from current funds. They presented data that showed that the county has worked very hard to contain the costs it can control, but that effort has resulted in deferred maintenance and a capital project gap demonstrated best by the dire need for a whole new justice complex, starting with the jail. Arapahoe County, they said, simply “cannot fund these needed projects out of existing revenues and continue to provide the current levels of services to its citizens.”
After listening to the presentation, committee member Lynn Myers, Senior Vice President of Denver South Economic Development Partnership, told The Villager that, “The Long Range Planning Committee represents a diverse group of citizens from across the county. I’m pleased to be participating. With a population of over 630,000 it is time to address the needs of a new justice center and the funds required to provide mental health programs, secure and humane facilities, technology and security upgrades. “
The committee is schedule to meet again on July 23 and July 30 to discuss possible funding options to meet its needs. For additional information and times and locations of those meetings, go to: https://arapahoegov.com/2050/Long-Range-Planning-Committee.
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