Published: February 7, 2014
Although I believe that the entire City for Champions concept got off to a rough start in terms of dissemination of facts, figures and the basics, there is now an open, robust discussion about the project and all the details of how to make sure it is a long term benefit for our community. The State Economic Development Commission has agreed that the City for Champions proposal is not only viable, but worthy of a significant share of the state's sales tax collected in the region over the next 30 years.
City for Champions proposes that within an established urban renewal authority area (URA), a portion of State sales taxes collected only above the region's existing sales tax base and ordinary, annual growth rate, be shared back to our community to invest in the construction of the projects themselves. Simply put, the state is going to charge its sales tax on all taxable purchases here in our region no matter what. Approval of the City for Champions proposal allows us to keep a larger share of that sales tax for investment right here at home, instead of sending it to the state's general fund.
Combined with private contributions and the same type of share back from city and county net new sales taxes, businesses throughout the region and those associated with this whole project will benefit because of local control, new economic activity and dollars which will stay here and go to work to make these new projects a reality. As proposed, the model is self-sustainable.
There is no request for new taxes. There is no increase in expenses in the city or county's existing general fund budgets. There is only an opportunity to use the new sales tax revenue generated by projects that wouldn't exist without this, to combine with private donors' and investors' dollars to generate new local revenue. Again, contrary to statements by some, this proposes absolutely no tax increase.
The county impact, even if we cut the sales tax projections in half in terms of what the most conservative independent analysis projected, will be a significant increase in cash flow over the long term. Please see the preliminary report on county budgetary projections at www.elpasoco.com. These additional funds paid largely by visitors, will actually increase the resources available to address infrastructure such as roads, bridges and storm water.
In addition, the newly generated sales tax dollars are proposed to flow through the URA, not through the city or county. The URA would be responsible for certain financial aspects of the projects. Private investors, using their own money, would have the opportunity to evaluate both the downside risks and upside potential of bonds issued by the URA and make their own decisions about whether or not the projected financing package is worthy of their investment. In other words, the bond holders assume the risk, not the taxpayers of Colorado Springs and El Paso County.
Citizens will join representatives from all of the specific projects in an advisory group which will work closely over the next several months with the governance structures for the projects and iron out numerous details. Before the county considers the intergovernmental agreement which would allow for our share of the sales tax increment to be used, a third party economic viability analysis will be performed.
I am routinely told that we should "run that county like a business". The problem is, government is not a business. It produces nothing. It does not have profit margins and it is required to provide critical public safety services like the jail, the courts, the DA, the coroner, police and fire which generate nominal revenue. However, we must instill strong business principles in conducting county business and if I do look at this proposal through business lenses, then I must look for the return on investment. In so doing, the opportunity to support new economic activity in our community through this public, private partnership shows great returns, not unlike other similar successful endeavors in our past, including the World Arena and Pikes Peak Center.
The opportunity is here. It is reasonable and supported by citizens and business and economic leaders throughout our region to move out of the economic stagnation that has weighed heavily on our community for years.
The unabashed political pandering, misinformation, rhetoric and flip-flopping of support depending upon audiences needs to stop. There is too much at stake for the future of our community to tolerate anything short of open, transparent discussions and facts. If the numbers work and the model protects the taxpayers, then we will proceed to the next steps. I support the process and look forward to its extraordinary potential.
Amy Lathen is vice chair of El Paso County Commissions for District 2.