September 20, 2010
Property Taxes
Constitution or Statute? Amendment 60 would be to the Colorado Constitution and therefore very difficult to change or fix once passed.
What You'll See on the Ballot:
Ballot Title: Shall there be an amendment to the Colorado constitution concerning government charges on property, and, in connection therewith, allowing petitions in all districts for elections to lower property taxes; specifying requirements for property tax elections; requiring enterprises and authorities to pay property taxes but offsetting the revenues with lower tax rates; prohibiting enterprises and unelected boards from levying fees or taxes on property; setting expiration dates for certain tax rate and revenue increases; requiring school districts to reduce property tax rates and replacing the revenue with state aid; and eliminating property taxes that exceed the dollar amount included in an approved ballot question, that exceed state property tax laws, policies, and limits existing in 1992 that have been violated, changed, or weakened without state voter approval, or that were not approved by voters without certain ballot language?
Recommended Vote: No
The Core Changes in The Measure:
Amendment 60 proposes amending the Colorado Constitution to:
- repeal the current voter-approved authority of local governments to keep property taxes above their constitutional limits;
- establish expiration dates for future voter-approved property tax increases;
- cut local property tax rates for public schools' operating expenses in half over ten years and replace this money with state funding each year;
- require publicly owned enterprises to pay property taxes and reduce local property tax rates to offset the new revenue; and
- provide new voting rights to certain property owners in Colorado and permit citizens to petition all local governments to reduce property taxes.
The Problems with the Measure:
1. I begin my analysis with a strong bias against putting most measures in the constitution, particularly when it comes to micro-managing the budget via the Colorado Constitution.
2. The next huge defect in the measure is that it dramatically encroaches upon local control. Each community has different needs and priorities. A blanket state constitutional over-ride evicerates any notion of local control.
3. The third problem with it is that it invalidates dozens of duly held elections and those election results in local communities. Currently, voters in 76 percent of municipalities, 81 percent of counties, and 98 percent of school districts have voted to allow government to keep and spend revenue above the constitutional limit, either temporarily or permanently.
4. While it would save an average homeowner approximately $87 in property taxes, it could cost school districts $337 million in addition lost revenue, which means schools closed, increased classroom sizes, and reduced quality and outcomes for public education in Colorado.
5. When fully implemented it would mean an addition $1.5 billion in cuts to K-12 while an average homeowner would be paying about $376 less on their property taxes.
6. The measure also requires a state backfill on the school budget which both disturbs Colorado's local tradition of property tax base for school districts but would also mean that the state's spending on K12 would go from 46% to 67% of the total state budget budget. This means a minimum of an additional $1.5 billion in cuts to higher education, prisons, courts, inspections, DMV offices, new constructions, roads, bridges, etc.
7. Amendment 60 has a very significant negative interaction with two other measures on the ballot (61, 101 -- which I'll address separately) but assuming that all three measures are approved by voters, the first-year impact will be to reduce state taxes and fees by $744 million and increase state spending for K-12 education by $385 million. Once fully implemented, the measures are estimated to reduce state taxes and fees by $2.1 billion and increase state spending for K-12 education by $1.6 billion in today's dollars.
8. The impact is not only de-funding most of the rest of what state government does, but also hits local governments and what they provide hard as well. Tax and fee collections for local governments are expected to fall by at least $966 million in the first year ofimplementation and by $3.4 billion when the measures are fully implemented.
9. Lawsuits will inevitably follow as we fail to fund federal mandates, honor contracts etc that result from a constitutional requirement to de-fund.
In The Real World: You won't recognize this state. This means closure of colleges and universities, privatization and significantly increased tuition for those remaining, closed courts open on rationed days with dockets that mean delayed access to justice, reduced or eliminated public safety inspections, reduced transportation projects and funding, eliminated services to people with developmental disabilites and increased wait-lists, reduced DMV offices, longer waits, less staffing for unemployment insurance, longer times on hold on phones, reduced capacity for law enforcement and public safety, closure of prisons, chronic or permanent pay freezes for state employees, furloughs (lots!), lay-offs, reduced contracting (jobs!) with private vendors.
A yes vote is a vote to launch Colorado into a chronic recession / depression. It would mean permanent loss of significant public AND private sector jobs and loss of infrastructure needed for schools, families and businesses in the state. Supporting this measure is a vote to sell the future of our children, our families, our jobs and our state down the river, permanently for $87 - $376 per year. While lower taxes are often inherently appealing, even in a state where have some of the lowest taxes in the country, there is a difference between frugality and anarchy -- and this is it.
The Text of Amendment 60:
Be it Enacted by the People of the State of Colorado:
Article X, section 20, The Taxpayer's Bill of Rights, is amended to add:
(10) Property taxes. Starting in 2011:
(a) The state yearly shall audit and enforce, and any person may file suit to enforce, strictest compliance with all property tax requirements of this section. Successful plaintiffs shall always be awarded costs and attorney fees; districts shall receive neither. This voter-approved revenue change supersedes conflicting laws, opinions, and constitutional provisions, and shall always be strictly interpreted to favor taxpayers.
(b) Electors may vote on property taxes where they own real property. Adapting state law, all districts shall allow petitions to lower property taxes as voter-approved revenue changes. Property tax issues shall have November election notices and be separate from debt issues. Property tax bills shall list only property taxes and late charges. Enterprises and authorities shall pay property taxes; lower rates shall offset that revenue. Enterprises and unelected boards shall levy no mandatory fee or tax on property. Future property tax rate increases shall expire within ten years. Extending expiring property taxes is a tax increase. Prior actions to keep excess property tax revenue are expired; future actions are tax increases expiring within four years. Non-college school districts shall phase out equally by 2020 half their 2011 rate not paying debt; state aid shall replace that revenue yearly. Nothing here shall limit payment of bonded debt issued before 2011.
(c) These property tax increase, extension, and abatement rates after 1992 shall expire:
(i) Taxes exceeding state laws, tax policies, or limits violated, changed, or weakened without state voter approval. Those laws, policies, and limits, including debt limits, are restored.
(ii) Taxes exceeding the one annual fixed, final, numerical dollar amount first listed in their tax increase ballot title as stated in (3)(c).
(iii) Those rates without voter approval after 1992 of a ballot title as stated in (3)(c).
SOURCES: BlueBook, Colorado Revised Statutes
September 18, 2010
We were very fortunate to have Adela Flores-Brennan (Center for Law & Policy), Bob Semro (Bell Policy Institute), Lorez Meinhold (Coordinator Implementation) and Nate Wilkes (impacted parent) as our panelists at our recent townhall.
Overall concept: The current system has those who are covered by employer-based insurance coverage, Medicare or Medicaid -- and for everyone else, there weren't really any options. The health of a health insurance exchange is intended to fill that gap with one-stop consumer interaction to help them find coverage they could not otherwise get.
Important Fact: No one has to use the exchange. If you like your current coverage at the current costs, you can keep it.
What has changed and when will it take effect?
Medicaid: Medicaid eligibility will be exanded to 133% of federal poverty in 2014. Medicaid reimbursement rates for medical providers will increase to 100% of Medicare rates in 2013 & 2014.
Medicare: The "doughnut hole - out of pocket drug gap" will be closed by 2020, starting in 2010 with $250 rebate, 50% discount on name brand drugs in 2011. No cost sharing for key preventive services, 10% bonus as incentive for primary care docs.
Employer Coverage: There is still no mandate for employers to provide health insurance, and most people with employer-provided coverage are not eligible to participate in the exchange. Tax credits will be available for small businesses (<25) for providing insurance in 2010.
Exchange: state run and regulated marketplaces for purchase of health insurance and handling of premium credits. Exchange is open to uninsured individuals and to small businesses, premium subsidies available for participants up to 400% poverty in 2014.
Minimum Benefits Package: There will be a minimum benefits package that must be in plans in the exchange, with at least 4 different plans available.
Caps: Lifetime limits on insurance policies go away in 2010 and annual limits on insurance policies start to go away in 2010 and gone by 2014.
Preventive Care: No out of pocket, cost-sharing (co-pays / deductibles) on basic preventive care for new plans beginning in 2010.
Guaranteed Issue - No Denial for Pre-Existing Conditions: Begins for children in 2010 and adults in 2014.
Other Consumer Protections - No gender rating, health status rating by 2014 and improved medical loss ratios to 80% in the individual market and 85% in the large group market. [Medical Loss Ratio equals the amount of your premium health care dollar that is actually spent on health care].
Individual Mandate: The requirement that everyone purchase insurance (via market, Medicaid, Medicare or exchange) will take effect in 2014, with some exemptions.
The State of Colorado will have a very key role in implementing federal health care reform. Here is a sample of some of the decisions we will need to make:
- What does the exchange look like? Public, private, quasi? Who is on the governing board and how do we prevent conflicts of interest?
- Do we consider entering a "multi-state compact" that the federal legislation contemplates?
- How do we define what is "in" or "out" of the medical loss ratio? In other words in determining what is a legit health care expenditure that would count toward the ratio, how do we define it?
- How does Ballot Measure Amendment 63 to the Colorado Constitution impact Colorado compliance?
- How do we ensure rating is on the largest risk pool, thereby keeping costs and premiums down?
SOURCES:
http://colorado.gov/healthreform
http://www.cclponline.org
https://bellpolicy.org/node/66
September 08, 2010
For PERA retirees (current or future) in Aurora:
Aurora North Meeting
September 20, 5:00 PM
Crowne Plaza Hotel
15500 E. 40th Ave, Aurora
Benefits Information
Aurora South Meeting
Red Lion Hotel
Benefits Information Meeting
September 30, 5:00 PM
Purchasing Service Credit Workshop
September 30, 7:30 PM
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