Vail opposes tax-slashing state ballot initiatives
July 7, 2010
VAIL, Colo. – The town of Vail is trying to stay ahead of some financially devastating statewide initiatives on the November ballot – initiatives that would reduce annual town revenues by more than $ 5 million by 2013.
Town Finance Director Judy Camp also estimates an annual loss of about $1.3 million from Vail Reinvestment Authority tax increment financing revenue, bringing revenue losses to more than $6.5 million annually.
The initiatives – Amendment 60, Amendment 61 and Proposition 101 – would limit property taxes, reduce various motor-vehicle fees and taxes, reduce telecommunication service fees, reduce state income taxes and limit state and local government debt, if passed by voters in November.
Vail Town Councilman Andy Daly said the initiatives are “draconian measures that will jeopardize Vail as we know it.”
” From a resort community perspective, these three initiatives could be devastating,” Daly said.
Proposition 101, which would reduce motor-vehicle fees and telecommunication service fees, would create about a $1 million loss per year for the town, Camp said.
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Amendment 60, which limits property taxes, would cost the town another $ 2 million per year, while Amendment 61 would limit the town’s debt in the future and cost the town a loss of about $ 2.3 million beginning in 2013, Camp said.
“We don’t feel there’s anything we can do about Proposition 101 nor on the property tax issue in Amendment 60,” Camp said. “So $3 million in annual revenue we don’t feel we can do anything about.”
Camp said the town could, however, prepare some strategies that would help protect the town from some of the other estimated revenue losses.
Camp listed two opportunities for the town that would block the impact of the initiatives. The town could defease its outstanding debt in 2010 if Amendment 61 passes, which would save the town $2.3 million annually.
Defeasing debt means the town would set aside the money it still owes to bondholders with a trustee, who would then pay the bondholders according to the initial debt repayment schedule. It means the town would no longer have outstanding annual debt service payments, so Amendment 61 wouldn’t apply, Camp said.
The second option is to issue debt through the Vail Reinvestment Authority before the end of 2010 for the Lionshead Transit Center and Welcome Center projects.
The town has already approved the first phase of the Lionshead Transit Center and is considering plans for the Welcome Center.
Bonding those projects in 2010 wouldn’t affect the town’s ability get bonds later, Camp said.
Mayor Dick Cleveland said that regardless of the potential shortfalls in revenues, the town would not operate with a budget deficit.
The Vail Town Council voted unanimously on a resolution opposing the three statewide initiatives and directed Camp to continue to prepare the strategies that would help the town save some of the estimated revenue losses, should the initiatives pass in November.