RTA’s revenues reduced by state | AspenTimes.com

RTA’s revenues reduced by state

Allyn Harvey

The elected officials in charge of the new valleywide transportation district were dealt their first major setback last month by the Colorado Department of Revenue.

The department ruled late last month that most automobile sales in Glenwood Springs are exempt from the 0.4 percent sales tax approved last fall by voters there to help pay for public transportation. The ruling appears likely to deprive the district of several hundred thousand dollars a year.

The decision is expected to cost the newly formed Rural Transportation Authority a big chunk of its budget, although officials were not able to say exactly, or even roughly, how much.

“It’s really hard to figure out the exact number until we collect taxes for a year and see what happens,” said Alice Hubbard, head of the transition team that’s merging the existing bus agency, the Roaring Fork Transit Agency, into the transportation authority.

For planning purposes this year, the RTA has cut $346,000 from its budget, in case of a worst-case scenario.

Originally, RTA officials thought they would be able to collect on all car sales in Glenwood Springs, because the state law that allows different jurisdictions to combine and form a transportation authority indicates such taxation would be appropriate.

But the department of revenue decided to apply the same rules to the Roaring Fork Valley’s Rural Transportation Authority (RTA) as it does to the Denver area’s Regional Transit District (RTD), even though the state law that paved the way for the formation of RTD is different from the one that governs the RTA.

Like the RTA, the RTD relies on taxes generated through retail and wholesale sales in several communities to pay for public transportation.

There aren’t any special restrictions on most of the taxes generated, so if someone from Eagle buys clothing at Cherry Creek Mall, some of the tax proceeds goes to the RTD.

According to Hubbard, state courts ruled 11 years ago that automobiles are different. The ruling said only people living within the boundaries of the RTD should be required to pay the portion of the sales tax that’s levied for the RTD when they buy a new car. So if someone from Carbondale buys a truck at Cherry Creek Ford, he will not be charged the tax that is earmarked for the metro area’s transit system.

The department of revenue’s decision to apply that same logic to the Rural Transportation Authority means the Cherry Creek resident who buys a car in Glenwood won’t have to pay the tax that goes to public transportation in the Roaring Fork Valley; although that Cherry Creek resident will still be taxed for the RTD, even though the car was bought in Glenwood.

The department’s decision is likely to have a significant impact on overall tax collections for the RTA, because the only people who will pay any tax on a car or truck are those who register the vehicle in Basalt, Carbondale or Glenwood. Residents from other portions of the RTA – all of Pitkin County and unincorporated portions of Eagle County located in the Roaring Fork Valley – won’t be required to pay the new taxes.

“It was easy to see where they were coming from with regards to people from outside the RTA who buy cars in Glenwood,” Hubbard said. “That they couldn’t find a way to at least require that every car registered within the RTA’s area be subject to the tax was harder to sympathize with.”

The reason Basalt, Carbondale and Glenwood residents are affected is because they passed a special tax dedicated solely to the RTA. Basalt residents will pay an additional 0.2 percent in taxes if they register their car at their home address: Glenwood residents 0.4 percent and Carbondale residents 0.5 percent.

When voters in Pitkin County and unincorporated Eagle County voted in favor of the RTA, they authorized the use of existing taxes to pay for their portion of the new organization’s budget, so they won’t see any increase in automobile taxes as a result of the RTA’s formation.

In a worst-case scenario, if no one living in the three cities registers a car within the boundaries of the three cities, the RTA will lose about $346,000 in annual revenues, Hubbard said. But she and other officials at the RTA don’t expect the worst case to come true.

“Who knows how much of that revenue we’ll have at the end of next year? 10 percent? 30 percent? 50 percent? It’s hard to know until we’ve had a year of tax collections,” said Aspen Mayor Rachel Richards, one of seven elected officials on the RTA board of directors.

Hubbard wasn’t willing to say just what kind of effect, if any, the department of revenue’s decision would have on service. That’s something for Richards and the other board members to decide at their meeting Friday and in the coming months

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