Colorado Springs officials will ask voters in November to allow the city to retain money that would otherwise be refunded under the Colorado Taxpayer's Bill of Rights and take a time-out from the law's ratchet-down effect on tax revenue to help the city recover faster from the economic downturn caused by the coronavirus.
The council voted 7-2 Tuesday to place the question on the ballot at the request of Mayor John Suthers, who has previously described the effort as a prudent measure that will help maintain city services during the fiscal crisis. He also expects it to be popular with voters based on a recent poll.
"The citizens appreciate the fact we are trying to deal with the COVID crisis," he said.
The ballot question asks residents to allow the city to keep $1.9 million in revenue collected in 2019 above the cap set by TABOR for public safety. The question also asks residents to set 2019 as the baseline for calculating tax revenue growth instead of 2020. Because 2020 tax revenues could be 5% to 10% lower than 2019 revenues, under TABOR the baseline for calculating how fast revenue can grow would drop to 2020 levels, also known as the ratchet down effect.
If the city does not take a time out, the amount of revenue the city is allowed to collect under TABOR could lag behind the amount of city tax revenue consumers are generating.
The growth in tax revenue under TABOR is limited to a percentage that equals inflation plus growth, typically about 3% per year.
If voters approve the ballot question, revenue retained by the city in 2021 could be 3% higher than 2019 revenue rather than 3% higher than 2020 revenues.
Suthers said he has already asked Colorado Springs Forward, a nonprofit focused on regional success, and groups that support police and firefighters to campaign for the measure.
Councilmen Don Knight and Andy Pico opposed the question, saying it sets 2019 as the baseline for calculating revenue growth into the future. If revenue levels dropped below the amount collected in 2019 in 2026, for example, Knight said he would like city leadership to return to the voters rather than use the 2019 revenue level as the baseline for calculating growth.
Council President Richard Skorman said he didn't think voters would begrudge the city having 2019 as the floor for tax growth calculations if the community faced another major recession.