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COUNTERPOINT: Taxes will rise and local communities will suffer

By Bill Jerke

Published October 4, 2008 at 12:05 a.m.

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If there is anything that recent events on Wall Street have taught us, it is that our economy is fragile. Further, this is not the time to be making fundamental changes that would have serious impacts on Colorado's economy.

Amendment 58 is dangerous on many fronts. It is a massive tax increase that would come at one of the worst times in our nation's economy. Consumers and businesses, already struggling, would bear the brunt of this tax increase. And because it changes a basic part of Colorado's tax code - dating back to 1953 - Amendment 58 would impair the ability of local governments to deliver important community services.

Gov. Bill Ritter and the proponents of Amendment 58 continue to try to hide the fact that it would increase taxes. The facts tell us otherwise.

The first eight words of the amendment ask, "Shall state taxes be increased by $321 million annually?" The Rocky Mountain News' Rocky Truth Patrol reported the "bottom line on 58 - it's a tax hike." And the Blue Book states, "Increasing taxes on oil and gas companies could negatively affect the state's economy and its citizens."

That point has been reinforced by 90 renowned economists, including four from Colorado. In a recent statement from the National Taxpayers Union, these economists concluded that Amendment 58 would have the effect of "raising energy prices on consumers and discouraging growth in Colorado's economy."

The economists warn, "We can safely predict this measure will cause reduced state oil and gas production, fewer economic opportunities, increased reliance on imports and higher energy prices."

I also have grave concerns about the impact of Amendment 58 to communities such as Weld County. Amendment 58 threatens the ability of local governments to repay outstanding bonds that are used to finance schools, firefighting infrastructure, water-treatment programs and other local improvements.

That's because Amendment 58 would remove an important mechanism in the state tax code, a property tax credit established decades ago to stabilize the tax base in more than a thousand property tax districts. This is the tax credit the proponents falsely call a "subsidy" or "incentive." Removing this tax credit is a thoughtless and unnecessary attack on local governments.

The credit evens out significant disparities in tax rates among the many overlapping school, fire, water and special districts in energy-producing counties. Failure to equalize the districts jeopardizes the bonds for schools, firehouses, water-treatment facilities and county road projects throughout Colorado as energy producers migrate from high mill-levy districts to low mill-levy districts. This is exactly the sort of chaos the framers of this tax policy sought to avoid.

And ironically, Amendment 58 would do nothing to solve the fundamental funding problem facing our state's colleges. Providing small scholarships to some students may be a warm and fuzzy "selling point" but in the long run will not help students.

Universities will receive no additional state funding. Voters will be less likely to vote for new education taxes in the future because of 58's funding fraud. Tuition will have to go up, typically by 9 percent to 10 percent a year. Tuition increases will zero-out any potential benefit of these small grants. Students are being promised the moon by the governor but actually will end up paying more for their college degrees.

Amendment 58 is an empty promise for Colorado and a real and present danger for taxpayers and local communities. Please join me in voting no.

Bill Jerke is a Weld County commissioner. He lives south of LaSalle.

Comments

  • October 4, 2008

    3:14 a.m.

    Suggest removal

    roger44 writes:

    Any tax hike affects the little guys, no matter what Bill Ritter says.

  • October 4, 2008

    3:52 a.m.

    Suggest removal

    mrfxx writes:

    Fascinating. Public assistance to individuals must be cut off when the individual is making what is determined to be "enough" - but public assistance to corporations is forever! Perhaps Colorado (and any other state with resources from gas and oil to gold and silver) ought to do what Alaska has done:
    determine that the citizens of the state "own" the resources and should benefit from them directly
    tax them at a rate such that neither state income tax nor state sales tax is necessary
    determine the cost of extraction (under Gov. Palin's administration, it was determined that it costs $25/barrel to extract oil) and anything over that cost is TAXABLE INCOME.

    Anyone who doesn't realize that the group funding the opposition to Amendment 58 is made up of oil/gas companies - which have funded the opposition to the tune of over $14 MILLION isn't paying attention. When an industry is willing to spend that much to attack an amendment, how much do you suppose they are making over and above that amount? Maybe that's a tax loophole we ought to get closed: if an individual cannot deduct political contributions on taxes, why should businesses be allowed to deduct them?

  • October 4, 2008

    6:42 a.m.

    Suggest removal

    campesino60 writes:

    The analysis finds that it would be highly unlikely that ending the severance tax break will cause gasoline prices to rise.
    Even with the tax subsidy gasoline prices continue to rise.
    Has any one seen a gas station NOT busy?
    It's time the state starts investing into it's broken education system.
    The first eight words of the amendment ask, "Shall state taxes be increased by $321 million annually?"
    a $300 million tax credit to the oil and gas industry every year
    Hmmmm.... $300 million to cover the tax break and $21 million is where????

  • October 4, 2008

    4:01 p.m.

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    joreymay writes:

    Is it even possible for the opponents of 58 to make their case without unnecessary attempts at deception? I'm not talking about the "big lie" about gasoline prices and "pass through" at the center of their campaign - most people are catching on to the fact that there is no way in creation that the international marketplace that sets the price of oil worldwide (including here) is going to be affected by such a tiny (per barrel) increase in production costs for such a small part of the international supply of oil. Nor am I talking about taking the TABOR-mandated "tax increase" language out of context. Those can be called "necessary" deceptions. I'm talking about the other ones - the really unnecessary deception attempts.

    For instance, he argues that the Blue Book states "Increasing taxes on oil and gas companies could negatively affect the state's economy and its citizens." It sounds impressive and authoritative, until you actually look and see that the quote comes from the "Arguments Against" section. The relevant advocate could claim that "if this passes, an armada of alien space ships will blow up the Sun and wipe out all life on Earth" and that claim would be "stated" in the Blue Book. It's like taking a quote from a Letter To The Editor or a humor columnist, and saying "The Rocky Mountain News says" that.

    Another is the statement from the infamous anti-tax advocacy group, the National Taxpayers Union. He introduces the claim by attributing it to "90 renowned economists, including four from Colorado", and only then reveals that it was filtered through that group. It is relevant to note that the so-called "statement" was mostly the usual anti tax, anti government rant - long on hyperbole and short on facts - that organization is widely known for. And that "renowned" is, charitably, an overstatement.

    Such obvious and unnecessary attempts at deception only serve to underscore the nature of the central arguments. If that column was intended to turn anyone against 58, it seems unlikely to work.

  • October 6, 2008

    4:02 p.m.

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    ILoveChipotle writes:

    campesino60 writes "The analysis finds that it would be highly unlikely that ending the severance tax break will cause gasoline prices to rise." but he forgets that Colorado's largest hyrocarbon reserves are natural gas. This tax hike will directly impact the already increasing cost of natural gas used to heat homes. Vote no on 58 or hope for warmer winters!!