Tax amendment foes foresee economic nightmare
By Marianne Goodland
Imagine Invesco Field at Mile High filled nearly to capacity with newly unemployed Coloradans. That’s the image that opponents of Amendments 60 and 61 and Proposition 101 want voters to have in their minds as they cast their votes this fall on the three anti-tax amendments.
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Monday, business leaders representing the 370-member coalition that sponsors the “No on 60, 61 and 101” campaign held a press conference at the stadium.
The “No on 60, 61 & 101” campaign estimates that if the three ballot measures pass on Nov. 2, Colorado will lose at least 73,126 jobs, and the job losses could go as high as 113,000, according to two economists.
Business leaders representing the coalition that opposes Amendments 60 and 61 and Proposition 101 gathered at Invesco Field at Mile High on Monday to discuss the negative impact the anti-tax measures would have on Colorado if voters approve them in November.
Photo by Marianne Goodland/The Colorado Statesman
Invesco Field at Mile High stands empty Monday, but opponents of Amendments 60, 61 and 101 want voters to imagine it full of unemployed Coloradans who could lose their jobs if the three ballot measures pass in November.
Photo by Marianne Goodland/The Colorado Statesman
Former state budget director Henry Sobanet of Colorado Strategies did one of the estimates on the job losses that could result from passage of the three measures. He wrote in a July white paper that K-12 education could be the biggest loser, with 21,448 jobs lost; general construction could lose 20,744 jobs; general government, which includes local and state government, could lose 13,359 jobs; health care could drop 11,761 jobs; and transportation could lose 5,814 jobs.
In terms of revenue impacts, according to Sobanet’s report, Amendment 60 would require the state to cover $1.2 billion in lost mill levy revenues that would support K-12 education; Amendment 61 would cost the state more than $2 billion in lost public finance, and Amendment 101 would cost state and local governments about $2.3 billion in lost sales and income tax revenue.
Amendment 60 amends the Taxpayers’ Bill of Rights in Colorado’s Constitution. It would reduce local property taxes for public schools’ operating expenses by 50 percent over 10 years and require the state to cover that lost funding. It also would require publicly-owned enterprises to pay property taxes. The largest of those enterprises is Colorado’s public colleges and universities that collectively hold more than $6 billion in property assets.
Amendment 61, which also amends TABOR, prohibits the state from issuing bonds for long-term needs, such as road and building construction; borrowing for short-term needs, such as day-to-day operations; and borrowing for lease-to-own purposes, primarily for new buildings or equipment. It also would prevent enterprises, such as public colleges and universities, from issuing bonds to finance new buildings.
Proposition 101 is a statutory change that has constitutional implications. It would reduce or eliminate taxes and fees on vehicle registration, leases, rentals and purchases; eliminate taxes and fees for telecommunication services.
It also would reduce the state income tax rate from 4.63 percent to 4.5 percent beginning in 2011, and eventually to 3.5 percent.
While Proposition 101 is a statutory change, its reduction of the state income tax could not be overturned without voter approval, due to TABOR. In addition, Proposition 101 requires voter approval for any increase in taxes or fees for vehicle or telecommunication services.
Tom Clark, executive vice president of the Metro Denver Economic Development Corporation and Denver Metro Chamber of Commerce told reporters that 73,000 people would find themselves without a paycheck if the measures pass. He noted that the last recession cost Colorado 110,000 jobs, and the state is just now beginning to see economic recovery. “These three measures will stop that recovery. It will plunge Colorado into another recession, and what will make it unique is that it will be a voter-approved recession,” Clark said.
Amendment 61 is especially dangerous, perhaps even insidious, said John Beeble, president of Saunders Construction. Because the amendment uses “borrowing” instead of “bonding, people think it has something to do with overspending in Washington,” Beeble said, but what it really does is end publicly-financed construction projects. “Colorado will be the only state that prohibits the use of bonding and revenue notes,” Beeble said. “I don’t want to be in that state.”
Beeble also noted that had Amendment 61 been in place in the past, the TRANS project that funded T-Rex and other transportation projects could not have happened, nor could the building of the University of Colorado Anschutz Medical Campus.
“Bonding is a responsible way to fund public infrastructure such as roads, dams, airport, light rail, school, college buildings and water treatment facilities,” Beeble told reporters. “The people behind 61 want to take bonding off the table and [that will cost] 21,000 jobs in small businesses — painters, pavers, plumbers, architects and electricians — who make large projects happen in Colorado.”
Rural communities also will be hard hit if the three measures pass, according to Chris Kraft of Qualridge Dairy, Fort Morgan. Rural businesses need good roads to get their goods to market, he said, which would be impacted by Proposition 101, and rural schools cannot afford the hit they would take if Amendment 60 is approved.
Richard Lewis owns RTL Networks, which was recently cited by Inc. magazine as one of Colorado’s fastest-growing businesses. He told reporters the “timing of the three measures could not be worse. Colorado is counting on small businesses to continue to play a major role in leading Colorado out of the economic downturn,” Lewis said, and pointed out that 90 percent of jobs created in a recovery are created by small business. If the measures pass, he said, “Colorado will no longer be a place for small businesses to grow and thrive.”
Lewis said that while businesses need reasonable regulation, they also need basic services provided by the government. Amendment 60 would cost schools $1 billion a year in public funding, he said, which would deprive large and small businesses of a well-educated workforce; Amendment 61 could result in tax increases that would need to cover unemployment because the state will no longer be able to borrow from the federal government. “Instead of moving Colorado forward, they will deliver our state a blow from which we may never recover,” Lewis said.
“I’ve never been as frightened with any measure on the ballot” Clark said. “This is not a social experiment — it’s a prescription for economic depression.”
Calls to the sponsors of the three measures were not returned.