Commissioners consider cuts, tax hikes
June 5, 2002
Facing a $1.1 million shortfall in this year’s budget, Pitkin County is wondering which services to cut now and which ones to cut later, if voters aren’t willing to raise property taxes.
County commissioners, grappling with a dire financial outlook, are contemplating three separate ballot questions to shore up the dwindling coffers available to fund basic county services. With the input of staffers, the county is also coming up with a list of cuts it will be forced to make if the tax measures are defeated.
But given the already growing deficit in the current operating budget, commissioners agreed Tuesday they can’t wait until after a November election to further tighten the county’s belt.
“I think we’ve got to prepare for immediate cuts,” said Commissioner Mick Ireland.
The county has already made more than $600,000 in cuts in its 2002 budget, including six staff positions, road work and building maintenance.
But a shortfall in available revenue to carry over from last year and sales tax and fee revenues this year that are down even more than the county anticipated are driving a deficit of $1.1 to $1.2 million, according to Tom Oken, the county’s chief financial officer.
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While the county has about $1.1 million in surplus funds from a few years ago to cover the shortfall, commissioners weren’t anxious to spend it all erasing this year’s red ink.
County section heads are meeting twice a week to come up with cuts that can be made immediately and others that can be made if the proposed ballot measures fail, said County Manager Hilary Smith.
Taking the advice of the county’s Financial Advisory Board, commissioners agreed voters must be presented with a list of the consequences if the tax measures fail at the polls.
“But how do you do that without sounding threatening?” said Commissioner Patti Clapper. “It’s not a threat, it’s the truth.”
“You can’t sugarcoat it,” said Alan Caniglia, advisory board member.
“Don’t make it a threat. Just make it, this is what has to happen,” agreed advisor Kent Mueller.
“The cuts have to be on the table,” Ireland agreed.
It’s important, advisory board members said, that voters see the county is already striving for an efficient operation and a lean budget, and not simply asking voters to bail out the budget with property taxes.
“Corporations, businesses and families are all making cuts. Voters will expect government to do the same,” said adviser Chris Ryan. “I think it will actually help the property tax pass if we can show we’ve gone through the process.”
If the tax questions are defeated, several commissioners stressed that the consequences should not all be internal pinches that only the staff feels.
“If there are going to be cuts, they need to be cuts in the services that everybody wants, but they didn’t want to pay for,” said Commissioner Dorothea Farris. “If you don’t want to pay for them, you don’t get them.”
“In the clerk’s office, you accept that you’re going to wait in line to register your car,” Commissioner Shellie Roy offered as an example.
“If you don’t vote for this, these are basically things we’re going to have to do without,” Ireland agreed. “I think the electorate will understand.
“I think we have to understand people out in the community are taking economic hits, too,” he added.
The actual amount of the proposed property tax increase has yet to be determined. It is anticipated that it will go to the county’s $17.5 million general fund, which pays for things like road maintenance, public works, the sheriff’s office, health and human services, and administration.
The county also plans to ask voters to let it keep $800,000 in excess property taxes that have already been collected. Last fall, the county did not readjust its tax levy down far enough to offset revenues generated by escalating property values. As a result, it collected more than it is allowed under the spending and taxation limits imposed by the state constitution.
The county must now either seek voter approval to retain that extra revenue or rebate it to taxpayers. The refund on a 2003 property tax bill, if the measure is not approved, would total $41 on a $1 million home, according to Oken.
Both a property tax hike and authorization to keep the excess tax revenue must go on the Nov. 5 ballot, but commissioners were split on the timing of a third tax question that would amend the county’s Home Rule Charter.
The proposed ballot question would amend the charter to make its limitations on property tax increases consistent with the limits set in the state constitution by TABOR, or the Taxpayers Bill of Rights.
The charter limits tax increases to inflation plus growth, but uses a slightly different formula than the one used by the state. This year, the charter limited the increase in property tax revenues to 5 percent; TABOR would have allowed an 8.4 percent hike, or an additional $170,000. The difference would mean $9 on a $1 million home, Oken calculated.
Some commissioners lobbied to put the charter amendment on the August primary ballot, arguing it would be shot down as the third property tax question on the November ballot.
But Ireland predicted its defeat in August, when the ballot is likely to feature nothing other than state GOP primaries.
“You’re going to put a tax question on the Republican primary? The word `duh’ strikes me as applicable,” Ireland said.
Commissioners made no decision on when to pop the question.