SDA is actively opposing Proposition 101, Amendment 60 and Amendment 61 which will be decided by voters in November. In order to provide more detailed information on some of the major problems with these initiatives, Sherman & Howard has created an advisory that SDA would like to share with our members. It is important that voters across Colorado understand the negative ramifications of this trio of ballot issues.
Here is a section of that advisory dealing with Amendment 60:
1. If a local government is considering asking its voters for a property tax increase as a sustainable source of revenue as part of its long term plans, it may be worthwhile to submit the election question for that increase in 2010.
If Amendment 60 is adopted, any property tax increase after 2010 must expire within ten years. A property tax increase election that is properly conducted under TABOR in 2010 will not be subject to the ten-year limitation that will take effect in 2011 if Amendment 60 is approved.
2. Local governments that are considering submitting a property tax increase to their voters this year should be aware that the dollar amount listed in the election question may become a limit for all future years, and should size the dollar amount accordingly.
Amendment 60 would cause the expiration of property taxes “exceeding the one annual fixed, final, numerical dollar amount first listed in their tax increase ballot title.” Under the Colorado courts’ current interpretation of TABOR, local governments may authorize a property tax increase of a certain dollar amount for the first year that may subsequently grow in future years based upon the growth of the assessed valuation of the local government. For example, a tax increase question can authorize an increase of property taxes by $100,000 in the first year and by whatever amount is generated in future years by a mill levy of 5 mills. In that case, if 5 mills generates more than $100,000 after the first year, governments may generally retain the entire amount without regard to the $100,000 limit in the first year. Amendment 60 would change this law so that no government could collect an amount greater than the dollar figure listed in the election question.
3. Local governments should be aware that any election to retain property tax revenues above the TABOR limit (often called “debrucing” elections) approved in 2010 or before would be voided by Amendment 60.
Amendment 60 states that “Starting in 2011…prior actions to keep excess property tax revenue are expired.” Therefore, even a property tax debrucing that occurs in 2010 will likely be considered a “prior action” in 2011 when Amendment 60 would take effect and would be voided if Amendment 60 is approved.
4. A local government that submits an election question to its voters seeking the extension of an expiring property tax in 2010 should consider using the full tax increase mechanism in TABOR to decrease the likelihood of the extension becoming void if Amendment 60 is approved.
Under current Colorado law, an election to extend an expiring tax is not a “tax increase” for TABOR purposes, and therefore the election need not comply with the TABOR provisions relating to tax increase elections. However, Amendment 60 would cause the expiration of property tax rates approved after 1992 without following the TABOR procedures for tax increases, which may include property taxes that have previously been extended without following those procedures.
5. Local governments that rely upon property taxes or fees charged against property and which have unelected boards should consider whether it would be advisable (and whether it is possible under law) to change their boards to an elected board in 2010.
Amendment 60 also states that unelected boards may not impose mandatory fees or taxes on property. Otherwise, the government will be unable to collect any mandatory fees or taxes beginning in 2011 if Amendment 60 is approved.
6. If a special district wishes to submit property tax or debt questions at a spring election, it should consider doing so at the May 2010 election, as this may be the last opportunity to do so if Amendment 60 or Amendment 61 is approved.
Under current Colorado law, special districts generally hold their regular elections in May of even-numbered years. Special districts may submit tax and debt increase questions to their voters at those elections. Amendments 60 and 61 would change this to allow property tax and debt questions only at November elections.
Tomorrow’s Bulletin will continue this discussion with information about Amendment 61.