Boulder County TABOR Notice

Daniel YergerFinancial Planning 2 Comments

Along with the Colorado Statewide Ballots, we get localized ballots in Colorado for our county and municipality. We’ve written about the Colorado Statewide ballots already, and for those readers not living in the Boulder County area, you can probably just read the statewide ballot article or otherwise take a pass on this week’s blog. We’ve divided it into countywide and district-specific sections, so read the parts that are important to your wallet, and get on with your day!

Countywide Ballot Issues

Boulder County Ballot Issue 1A – Countywide Wildfire Mitigation Sales and Use Tax

The measure proposes increasing the sales tax in Boulder County by 0.10%, effective in 2023. The tax will not sunset in the future, meaning that the tax will last indefinitely. The purpose of the tax is to fund wildfire mitigation, with a specific eye towards prevention and funding the immediate potential costs of a large-scale wildfire in Boulder County.

Financial Impact: Moderate. The cost of this tax equates to $0.10 on a $100 expenditure. Fundamentally this is a small cost, but all small costs do aggregate into larger costs. Being a sales tax, this also means that the taxes are “regressive,” as low-income individuals have to spend a larger percentage of their income on sales-taxed goods than high-income individuals.

Boulder County Ballot Issue 1B – Emergency Services Sales and Use Tax

The measure proposes increasing the sales tax in Boulder County by 0.10% effective in 2023, and declining to 0.05% in 2028. The tax would go to fund the building of a modern search and rescue training and operations facility on already-designated north Boulder land and would then go to fund training and operations on a long-term basis with the remaining half of the tax after the first five years.

Financial Impact: Minor. The cost of this tax equates to $0.10 on a $100 expenditure for the first five years and $0.05 on a $100 expenditure afterward. Fundamentally this is a small cost, but all small costs do aggregate into larger costs. Being a sales tax, this also means that the taxes are “regressive,” as low-income individuals have to spend a larger percentage of their income on sales-taxed goods than high-income individuals.

Boulder County Ballot Issue 1C – Transportation Sales and Use Tax Extension

This ballot issue extends an existing sales tax of 0.10% indefinitely, which goes to fund road and bridge improvements in Boulder County. This is separate of taxes and funding for services such as RTD or the ever-delayed Fastracks project but specifically goes to fund roads and bridges in the area.

Financial Impact: Neutral, with caution. This tax already exists. If the bill passes, it will simply continue in perpetuity rather than having a sunset provision. If the bill doesn’t pass, funding will still last until 2024, after which alternate funding sources will have to be sought. It goes without saying that the upkeep of bridges and roads is important, though some will argue that no tax should exist in perpetuity and that all taxes should come up for review at a given time.

City of Boulder Ballot Issues

City of Boulder Ballot 2A – Climate Tax

The ballot proposes creating an excise tax on city utilities, to take effect in January of 2023 and expiring at the end of 2040, which is used to provide funding for climate-focused programs, such as residential energy reduction incentivizes, renewable energy projects, and a focus on funding zero-emissions projects. Spending from the climate tax has increased by approximately 4% annually.

Financial Impact: Moderate to high. The proposed tax is not fixed as a percentage of sales or a mill levy but is targeted to produce $6.5 million in annual revenue as compared to the current tax of $1.8 million. This is estimated to be divvied up on a per-customer basis via utilities and is estimated as $43 per residential customer, $241 per commercial customer, and $705 per industrial customer. As with all “flat” taxes and fees, these are fundamentally regressive and cost more for low-income consumers than high-income consumers.

City of Boulder Ballot Issue 2B – Approving Issuance of Bonds to be Paid from Climate Tax

To accelerate the impact of climate measures, 2B goes hand-in-hand with 2A and anticipates using the tax revenue from 2A to fund a bond issuance to fund up to $75 in bonds (as a cost, not as the bond issuance but as a maximum taxpayer cost.) The current anticipated bond issuance is $59,200,000 with $6,720,000 in interest payments.

Financial Impact: Low to none. This does not incur any additional taxation of residents of the City of Boulder but simply aims to accelerate the expenditures on climate priorities. This does come at a cost to the tax dollars themselves, with projects that could otherwise be self-funded over a longer time period.

Town of Erie

Town of Erie Ballot Issue 3D

This ballot issue continues a 4 mill levy property tax which is used to fund the preservation of natural areas along Boulder Creek and Coal Creek, including trail development and repair and open space protection.

Financial Impact: Neutral. This is a continuance of existing property taxes in the area. If the mill levy expires, property taxes might “slow down” year over year or decline in a real dollar amount. If the mill levy continues, any residents of Erie are unlikely to notice a difference in their property taxes; other than the annual “BY HOW MUCH?!” response we all typically have when we get our tax assessments.

Town of Lyons

Town of Lyons Ballot Issue 2G

This proposal changes the lodging tax from $2 per day per room or accommodation to 8% of the rental rate. The intent is to attempt to scale tax revenues with the potential revenues of lodging in the Lyons area, which in turn will be used to improve visitor accommodations and infrastructure for tourism within the Town of Lyons.

Financial Impact: High but specific. If you do not have a rental property in Lyons, there is no material impact from this bill to you unless you plan to have guests staying in the area. The tax adjustment, however, is significant. For scale, the current rental rate would have to be $25 or less for the tax to go down (which is a rare case.) In turn, this means the rental rate tax will go up, potentially significantly, depending on the cost of the lodging itself. While there is a limited case to be made that for the lowest cost rentals, this reduces the “regressive tax” of a flat dollar tax, we see the potential taxation exploding by dozens or hundreds of percent relative to the original $2 fee for most accommodations in Lyons.

Town of Nederland

Town of Nederland Ballot Issue 2J

This ballot proposes to increase sales taxes in Nederland by 0.25% to fund law enforcement and public safety measures. This increases the overall sales tax from 4.00% to 4.25%.

Financial Impact: Moderate. This is a fairly significant leap in sales tax rates, albeit it does not anticipate raising much in a hard dollar sense, with estimates in the first year anticipated to raise only $156,250. Much of this will likely be borne by tourists or non-locals, but for those who make regular purchases in Nederland, the expense change can be felt directly. It is also noteworthy that the sales tax in Nederland as a city is already one of the higher rates in the state, not inclusive of County and State sales taxes.

Town of Nederland Ballot Issue 2K

This ballot proposes increasing the sales tax on Marijuana products sold in Nederland by 5% to raise $160,000 in taxes annually. The proceeds would then be used to fund parks and recreation programs and services within the town of Nederland.

Financial Impact: Extremely high but specific. A 5% sales Tax increase effectively doubles the town sales tax rate on Marijuana purchases in Nederland. This is of limited consequence, only impacting those who purchase Marijuana and those who sell it. It is noteworthy that a tax increase this significant may drive sales revenue down to Boulder for Marijuana purchases simply to avoid the tax rate.

Town of Nederland Ballot Issue 2L

This ballot issue proposes to double the current lodging tax in Nederland from $2 to $4, with the continuation of public programs and services funding via the tax.

Financial Impact: Low to moderate. While a doubling of the lodging tax is significant, a $2 nightly increase is not a material or significant financial cost. As discussed with prior taxes, this is fundamentally a regressive tax fee with a greater impact on low-income individuals than on high-income individuals.

Town of Superior

Town of Superior Ballot Issue 2M

This ballot proposes to increase the sales tax in Superior by 0.16% from 2023 through the end of 2032, which shall be used to increase funding for Marshall Fire recovery efforts.

Financial Impact: Low to moderate. The sales tax increase is not significant in of itself, targeting an additional $800,000 in funding annually. It is, as with other sales tax increases, regressive, and likely to impact low-income individuals more than high-income individuals.

Boulder Valley School District No. RE-2

Boulder Valley School District RE-2 Ballot Issue 5A

The district proposes a municipal bond issue of up to $350 million, with repayment costs not to exceed $714 million and with district taxes to be increased by no more than $32 million annually to service the debt. The ballot does not specify the funding mechanism for taxes, but presumably, as school districts are funded through property taxes, this would create an increased mill levy rate within the school district for funding. There is a specific list of projects that are desired for funding, including updates to structures, improvements to the continuing technical education program, replacing New Vista High School entirely, and building an elementary school in Erie.

Financial Impact: Moderate to high. Though the mill levy is not specified, a bond issuance of $350 million with a potential total debt service of $714 million is a substantial financial undertaking. While it’s not guaranteed that the school district would end up paying $364 million in interest payments, it’s still an enormous amount of money for these projects, which could result in significant mill levy increases in the school district if interest rates and terms are not well balanced.

Nederland Fire Protection District

Nederland Fire Protection District Ballot Issue 6A

The ballot proposes raising the property tax mill levy by one mill per year for the next three years, for a total raise of 3 mills, to create $250,000 in funding via property taxes for vehicle and building replacement and maintenance within the fire protection district.

Financial Impact: Moderate to high. While the mill rate change of 3 mills itself is not too significant, the mills do not adjust to the assessed value of property in the district. As a consequence, high appreciation in real estate values could see that the funding for the projects accelerates quickly with real estate appreciation in the future, as there is no sunset on these Mill provisions.

Left Hand Water and Sanitation District

Left Hand Water and Sanitation District Ballot Issue 6B

The ballot requests to take on debt up to $350,000 with no more than $480,000 in repayment. As funding, the proposal asks to adjust the mill levy “at will” in order to achieve the payments required for the debt service required on the debt. The debt is intended to be used for assorted improvements and repairs for the facilities and services within the district.

Financial Impact: Low. While the ability to adjust mill levy “at will” isn’t ideal, the debt level being talked about here is in the hundreds of thousands rather than the millions of dollars as with other issues (i.e., the Boulder Valley School District.) Ultimately we would expect any mill levy adjustments to be minute.

Boulder Public Library District

Boulder Public Library District Ballot Issue 6C

The ballot proposes to raise $18,780,000 annually for the library through a 3.5 mill levy adjustment for those living within the district. Funding would be used to improve literacy programs, fund public meeting spaces and workshops, update books and materials, extend library hours, and generally improve the quality of the library facilities in boulder. The ballot issue also proposes to make excess funding collected for the district exempt from the 5.5% property tax revenue limit under TABOR.

Financial Impact: High. 3.5 mills in of itself is less than we’ve seen for other projects and issues, but the price tag of this proposal is enormous. $18.7 million is an enormous amount of money for the proposal. For reference, the average annual operating budget for a library in the United States is $300,000. While the Boulder library certainly operates at a higher cost level than the national average due to cost of living and other factors, in 2022 it was approved for $1,399,088 from property taxes and was anticipated to spend $1,093,103. Succinctly then, the ballet proposes to 13.42x the operating revenues of the library in Boulder through a property tax that ends up being quite significant.

Gold Hill Fire Protection District

Gold Hill Fire Protection District Ballot Issue 6D

This ballot proposes increasing the mill levy on property in the district by 6.36 mills commencing retroactively to the start of 2022, in order to provide funding for firefighting equipment, repairing vehicles, and maintaining the station in addition to hiring another employee.

Financial Impact: High. The district’s needs are small in terms of hard dollar costs, but a 6.36 mill increase is a significant property tax increase for residents of the area, and is likely to be felt on the property tax assessments for collection in 2023.

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