June 30, 2010
Colorado Springs Mayor Lionel Rivera called Wednesday for a three-year timeout from the part of the Taxpayer’s Bill of Rights that limits how much tax money the city of Colorado Springs can spend as the economy recovers.
Rivera wants a measure on the November ballot that would allow the city to retain what TABOR calls surplus revenue for the city’s 2010-2012 budgets, if there’s a surplus in 2010.
Rivera wants the change because the city’s budget has been shrinking dramatically during the nation’s economic plunge. TABOR sets a revenue cap for the city government that’s based on what have been declining collections of sales and use taxes, meaning it could be years before the city could spend at pre-recession levels. Rivera said such a TABOR timeout would be the only way city government can recover from the economic recession.
Rivera made his remarks during his final State of the City address at a Greater Colorado Springs Chamber of Commerce luncheon at the Doubletree Hotel near the World Arena.
“I ask my colleagues to support this in concept and even take action if revenues rebound strongly,” he said, drawing loud applause.
The mayor’s proposal mirrors Referendum C, which voters approved in 2005 to allow the state of Colorado to take a TABOR timeout for five years. The mayor’s proposal could be referred to the November ballot through a City Council vote.
Colorado Springs Councilman Sean Paige said he would “certainly consider” what he called a “TABOR refund timeout” of three to five years.
“I’m a strong supporter of TABOR, but I’m also on record as saying that I don’t think it was handed down on tablets from a burning bush,” he said.
“If we look like we’re moving into a period of economic rebound in which we would have to go to voters one year at a time to ask for a refund, I think a case might be made to say, ‘Why don’t we just do it on a three-year timeframe or a five-year timeframe with a sunset provision, and if we don’t handle those funds responsibly, you can take it away?’” Paige said.
It’s unclear whether the city will hit the TABOR revenue cap this year. Last week, Terri Velasquez, the city’s chief financial officer, told the City Council it would be difficult to know until the revenue numbers are audited in 2011.
The city exceeded the TABOR property tax cap for 2009 by about $600,000, an issue council members will discuss in July.
Councilman Darryl Glenn said he doesn’t believe the city will hit the revenue cap this year. He also said it would be premature for the council to pose such a question to voters.
“You have to base it on having credibility with the electorate,” he said. “I don’t think we do.”
Rivera said the city may hit the cap this year given double-digit increases in sales and use tax revenue and a $3.7 million payment from Colorado Springs Utilities now sitting in escrow because of confusion over ballot Issue 300, which eliminates payments that city enterprises make to the city.
“We’re not even factoring what’s going on with medical marijuana. That could potentially be $1 million this year,” Rivera said in an interview after his speech.
“Once we pass our rules and regulations, it’ll probably be a $5,000 first-time fee for every one of the dispensaries and grow operations and infused products (businesses), and then in the future, it’ll be $2,000 a year – at least that’s what I’m going to advocate for – for renewals,” he said.
Also, in his speech:
• Rivera also called for changes to PERA, the state public employees’ retirement plan, which includes city employees.
Rivera complained that the system forces the city to pay more than 13 percent of an employee’s salary into the plan while employees kick in 8 percent. He said lawmakers need to change that system to make employees pay more.
Rep. Michael Merrified, a Colorado Springs Democrat who attended the lunch, said the mayor may have a difficult time getting fans for his plans at the General Assembly.
Lawmakers earlier this year agreed to limit cost-of-living increases for retirees while increasing contributions for workers and the government.
That plan, a hard sell for some members of the GOP and some Democrats, got through because PERA faced insolvency. A new plan, Merrifield said, would likely be dead on arrival.
• Rivera called on El Paso County commissioners to reverse a decision they made that has resulted in less money for road and bridge work in Colorado Springs and other local cities.
Commissioners shifted tax revenue that had been designated for that work — about $2.5 million annually for Colorado Springs — into the county’s general fund.
“That’s something the mayor and I spar on regularly,” Hisey said after the speech. “I certainly wasn’t offended by that. If I were the mayor, I would likely be asking about that money.”
Hisey said commissioners made the shift after determining that El Paso County was sharing more of its road and bridge money with cities than other Colorado counties.
He said commissioners aren’t likely to consider reversing their decision for at least a couple years, given that upcoming assessments for property taxes are likely to result in declining tax revenue for the county.
• Tom Roeder and Joanna Bean contributed to this report.