COLORADO SPRINGS — The effects from pandemic-related shutdowns make an appearance on the ballot for Colorado Springs voters in the form of Issue 2A.
2A is a Tax Payer Bill of Rights related-question that asks two things: The first, to retain 2019’s $1.9 million refunds entirely for public safety and the second, to set 2019’s revenue cap for 2021.
If that sounds confusing, it is. The Tax Payer Bill of Rights (TABOR) gives Colorado voters the right to vote on tax increases but also implements revenue caps for state and local governments. TABOR’s revenue caps are based on a growth formula and based on the previous years’ revenue. So, when faced with a year like 2020, the City of Colorado Springs’ drop in revenue poses problems for the years following.
The TABOR Cap, frequently referred to as the “Ratchet Down” effect, means the city’s 2021, 2022, 2023, and subsequent years the city’s growth cap would be based on the severely depressed 2020 revenue, a year of projected growth before the pandemic. In the years following, it would lead to refunds of $10.8 million, $16.9 million, and $16 million in respective years from 2021-2023.
Not to be confused with federal and state tax returns, TABOR refunds would be issued by the city and are relatively small (for example, the 2019 refund worth about $1.9 million breaks down to about $4 per person). The refund would mean service cuts from the city.
“We have a number of things, for example, our capital improvements programs so, repairing bridges and rooftops and that type of thing.” said Charae McDaniel, the chief financial officer for the City of Colorado Springs, ” As well as maybe mowing fewer times in our parks and putting less weed maintenance on our medians across the city. Those kinds of impacts would be felt.”
Issue 2A, if voters approve it, would forgo those refunds by allowing 2019’s revenue cap to be the basis for the city’s revenue cap in future years, avoiding the disruption 2020’s downturn would cause. It also ensures the TABOR growth formula to maintain growth caps in the years following.
“The 2A ballot item does not increase taxes, and it allows the city to recover at the rate the economy would be recovering due to the COVID impact,” McDaniel said.
McDaniel says the question sticks to TABOR’s intention of limiting a government’s growth, as the city will still be below the levels of economic activity compared to if the pandemic had not disrupted the economy.
“We would not even be back to the 2019 level, so really this is constricting government, not even just having it grow at a slow rate and not grow too quickly. It really is reducing the government services,” she said.