Treasurer admits bill increased property tax tab
Official testifies in TABOR lawsuit that more money collected as a result of mill levy freeze
By Berny Morson, Rocky Mountain News (Contact)
Published May 6, 2008 at 1:47 p.m.
Updated May 6, 2008 at 1:47 p.m.
State treasurer Cary Kennedy conceded today on the witness stand that a bill passed last year by the legislature alters the way taxes are calculated with the net result that many property owners pay more.
But Kennedy continued to insist the 2007 law, SB 199, does not violate Colorado's Taxpayer's Bill of Rights.
Kennedy's testimony came on the second day of a lawsuit brought by opponents of the 2007 law. They say SB 199 should have been referred to voters under TABOR provisions.
The 1992 Constitutional amendment allows tax increases only with approval at the ballot box.
SB 199, passed with the backing of Gov. Bill Ritter, froze mill levy rates in most school districts. The frozen rate increases the tax on properties that have appreciated in value.
Statewide, the increased tax revenue this year is more than $117 million.
Kennedy stuck to her position today that SB 199 didn't need ballot approval because voters in 174 of the state's 178 school districts had already adopted language exempting themselves from the relevant TABOR provisions. SB 199 doesn't apply in the four districts where voters didn't adopt such exemptions.
But Kennedy's interpretation of the local ballot measures is strongly resented by school board members who testified in the trial. They recall promising voters that the ballot initiatives would allow school districts to retain excess revenue, but would not raise taxes.
"I told voters, 'You can trust me,'" said former Grand Junction school board member Marcia Neal. "Now that mill levy freeze is coming in, and people are saying, 'I thought you said that wouldn't happen.'"
Angie Whitford, an attorney for the Colorado Department of Education, pointed out to Neal that the language approved by Grand Junction voters in the 1999 referendum said there will be no new taxes or rate increases. But it appears to allow the school district to increase revenue if the rate of the existing tax is frozen, but not increased.
In her testimony, Kennedy said she came up with the idea in 2003 that the ballot measures already adopted by most districts permitted the state to freeze mill levy rates and boost revenue. At the time, Kennedy was working as a school finance analyst for the Colorado Children's Campaign.
Kennedy today sparred with Allan Hale, an attorney for the parties that have sued to overturn SB 199.
Hale wondered why numerous lawyers, legislative analysts and members of the state education department never realized that the local ballot items had opened the door to a revenue increase.
Kennedy responded that no one in the education community had a reason to think about that possibility.
School districts are entitled to a set amount of money, determined through a formula. An increase in local tax revenue is offset by a decrease in state aid so that the formula amount is achieved.
The additional $117 million in local taxes realized under SB 199 reduces the amount the state must pay to public schools. That money is then available to other programs.
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May 6, 2008
3:33 p.m.
Suggest removal
SirRealist writes:
Suffice it to say that the word "enough" does not exist within taxing authorities, and if they can't get you to agree it give it to them, they'll fenegle a way to TAKE it. After all, their mentality is that it all belongs to them anyway. Sweet deal, if you can get it.
May 6, 2008
3:39 p.m.
Suggest removal
dave437 writes:
This is standard operating procedure for Democrats. They low ball the actual cost to taxpayers and then after approval, they suddenly discover that the cost was more than they estimated. Somehow nobody bothered to sit down and figure out what it would really cost. Does anybody really believe that? Democrats are trying to do the same thing with Referendum C right now. The huge tax increase they got with that is now not enough. Andrew Romanoff now wants the limited time frame for Ref C to be lifted so the state can continue to keep our money. Somehow I knew that wouldn't be enough money for the government.
May 6, 2008
5:08 p.m.
Suggest removal
pubschoolmom writes:
From reading this story, it would be easy to miss the fact that the mill levy plan simply gave effect to the will of the voters in 174 out of 178 school districts that deBruced -- i.e., voted to allow the district to keep all revenues, rather than cut property taxes because of TABOR limits. I don't understand how it is that people who believe that voters have a right to decide on their tax rates can't accept it when the people vote to allow a district or city to keep the revenues they collect.
By the way, no one's tax rates went up under the mill levy plan. The freeze just stopped automatic tax cuts THAT THE VOTERS HAD REJECTED! In fact, the plan even cut mill rates in districts with the highest rates.
The use of the words "admit" and "concede" is particularly odd -- as if proponents of this law had been trying to hide the fact that it would result in increased revenues. There wasn't a "concession" here, just a statement of fact.
Might as well have a headline: "State Treasurer Concedes that State Collects Taxes."
May 6, 2008
5:29 p.m.
Suggest removal
LoFat writes:
Dear pubschoolmom. I sure hope that your children will be able to read and write when they leave school. The schools are failing to teach todays kids even the basics of education. Voting to De-Bruce is just another way of saying "I do not like that law so I do not have to obey it."
AND IT IS NOTHING BUT AN ATTEMPTED END RUN AROUND A LAW THE DEMOCRATS DID NOT LIKE!!
But of course I forget the Liberals are above the law..
May 6, 2008
5:33 p.m.
Suggest removal
Lowtaxequalsfreedom writes:
Pubsmom
If the localities had already done this then why did Ritter interfere? According to you it was a redundant action?
Is it is redundant as you put it, that would be a HUGE waste of limited taxpayer dollars.
Why would Ritter do what the localities already had done?
May 6, 2008
9:12 p.m.
Suggest removal
lissmth writes:
"In her testimony, Kennedy said she came up with the idea in 2003 that the ballot measures already adopted by most districts permitted the state to freeze mill levy rates and boost revenue."
What a devious person! They (the Democrats) are exploiting every taxpayer who voted to de-bruce only so their districts could keep extra money that came their way. By extra money, they meant such items as grants for special projects or tuition for pre-school. Voters did not mean to give the Cary Kennedys of the world a free pass with their wallets.
This woman need to be defeated next time! She is a devious disgrace.
May 6, 2008
9:18 p.m.
Suggest removal
lissmth writes:
"I told voters, 'You can trust me,'" said former Grand Junction school board member Marcia Neal. "Now that mill levy freeze is coming in, and people are saying, 'I thought you said that wouldn't happen.'"
pubschoolmom, what part of that do you not understand? Sounds like you work for Cary Kennedy?
May 7, 2008
6:40 a.m.
Suggest removal
socrates writes:
Housing values go up and people end up paying more taxes. It's a reality - not a tax hike. The mill levy freeze is exactly that - a freeze. The lawyers are so out on a limb on this, these districts already voted to exempt themselves from the restrictions on revenue to school districts.
There is no legal basis at all for their argument, just a bunch of blathering lawyers.
May 7, 2008
4:32 p.m.
Suggest removal
Lowtaxequalsfreedom writes:
You can freeze the multiplier all day long but if the base rises you have not froze anything! My truck still gets the same MPG but yet the latest fuel up was 100.00 compared to 50.00. Guess my fuel cost did not increase. Maybe the Dems should not be so upset with big oil.It's all in their head.
May 7, 2008
4:37 p.m.
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Lowtaxequalsfreedom writes:
The bigger problem here is what the State really tried to do. First The State mandates per pupil spending. Second the localities votes on levy. Third the State makes up the difference. Ritter and Kennedy pulled this entire stunt not so the local education would have more money but so that the State would have to pay less. This allows them to redirect previous allocated cash to other areas of the budget.
Tabor clearly puts your local districts budget into he hands of the local voters. The State needs to stay out of it. So do the Feds. Quit taking the money in the first place and let the localities decide what type of funding and what type of schools they want. Competition will kick in and we will all be better off!
May 8, 2008
9:01 a.m.
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Lowtaxequalsfreedom writes:
Socrates wrote: "Housing values go up and people end up paying more taxes. It's a reality - not a tax hike. The mill levy freeze is exactly that - a freeze. The lawyers are so out on a limb on this, these districts already voted to exempt themselves from the restrictions on revenue to school districts."
Actually increases in housing values can dramatically rise faster than inflation. Tabor mandates that the levy reduce some to offset this rapid appreciation. A freeze keeps you from getting your Constitutional reduction. A freeze is a tricky way of saying increase. If you do not get a reduction you have paid more.
When you go grocery shopping and the store charges you the normal price rather than the sale price, did you pay more or the same? Did you get a freeze or rather ripped off?
May 8, 2008
9:41 a.m.
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Lowtaxequalsfreedom writes:
http://caldara.i2i.org/?cat=7
May 16, 2008
2:02 p.m.
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Teaparty writes:
Those commenting here in defense of Ritter's mill levy freeze seem to have no understanding of the Constitution or the language of the TABOR amendment. Nowhere in the text will you find nebulous and meaningless terms such as "tax hike" or "tax cut." Article X, Section 20(4)(a), of the Colorado Constitution requires approval by a vote of the People for “any new tax, tax rate increase, mill levy above that for the prior year, valuation for assessment ratio increase for a property class, or extension of an expiring tax, or a tax policy change directly causing a net tax revenue gain to any district.”
Most so-called "de-Brucing" ballot issues do not even propose to circumvent TABOR entirely, but rather relax just a portion of TABOR. One common example of de-Brucing ballot issue language allows a district to keep and expend “excess tax revenues” above the limitations of Article X, Section 20, of the Colorado Constitution. This says nothing about “freezing mill levies,” nor does it give the district a blank check to increase spending on any frivolous new projects elected officials can dream up!
TABOR itself provides the language districts may use to "weaken" TABOR; it says nothing about killing it entirely. In fact, there's nothing in the Colorado Constitution about *permanently* weakening or eliminating TABOR or any other part of the state Constitution! It is absurd to even presume such a thing. For a district to assert that it is no longer required to adhere to a portion of the state Constitution would be like Colorado deciding it doesn't care to abide by the 2nd Amendment of the Constitution of the United States! (Oh wait – Ritter’s gang is trying to do that, too!)