In 1992 Colorado approved The Taxpayer Bill of Rights, commonly known as TABOR. Under TABOR, local governments including special districts like Pueblo West, cannot spend increased revenues collected under existing tax rates or raise rates without voter approval. In many cases, TABOR has led to an actual drop in tax revenue as it requires revenue generation be set year-over-year. This becomes important in periods of economic recession, when tax revenue temporarily drops. Following economic recovery, it becomes very difficult to return tax revenue to pre-recession levels, an effect known as “ratcheting down”.
TABOR provides a method by which exemptions can be approved by voters. Referendums for TABOR exclusions commonly known as “De-Brucing”, after TABOR author Douglas Bruce, permanently remove restrictions on specific budget areas. This process has been utilized extensively in Colorado. By 2015, more than 50 counties, close to 200 local governments, and 174 of Colorado’s 178 school districts had already De-Bruced some or all revenue sources.
Pueblo West maintains one of the leanest local governments in Colorado. To date, fiscal discipline and creative staffing solutions, to include multiple cross-training efforts, have maintained public services while limiting the need for increased spending. As a special district, Pueblo West provides many of the same public services as an incorporated municipality, but is limited in its revenue generation options.
Pueblo West is a growing community. With that growth comes expanded community demand for services provided by the Metro District as well as increased infrastructure requirements. While efforts to stretch revenue are ongoing, they are meeting diminishing returns. Simply put, the needs of this community are beginning to outweigh revenue.
To emphasize this point, Pueblo West and the City of Fountain have similar size populations. However, not only is Fountain half the geographical size of Pueblo West, it has the ability to staff twice as many employees as does the District. Their 78 street maintenance employees each represent 10 miles of road, each of the District’s 12 streets employees represent 33.6 miles. Fountain’s 39 full time firefighters each protect an average of 769 residents. Each of Pueblo West’s 18 full time firefighters protect an average of nearly 1,600 residents, more than current recommendations set by the National Fire Protection Association.
Fountain, as an incorporated city, utilizes multiple revenue sources including a 3.75% sales tax to fund their expanded public services. Meanwhile, Pueblo West is limited to fees, grants, small excise tax sources and, most importantly, property taxes. Despite growing community demands, the property tax rate in Pueblo West remains 20.193 mills, putting the District in the bottom 25th percentile in Colorado. In comparison, Village Center Metropolitan District in El Paso County has a mill levy rate of 35 mills and Norris Ranch Metropolitan District is set at 50 mills.
Through TABOR, the State of Colorado sets limitations on both spending and revenue increases by the Pueblo West Metropolitan District. With our 20.193 mill property tax rate, expected revenue in 2016 is $4,532,736. However, TABOR requires that current revenues be based on the previous year. As a result, the state has set a limit of $4,450,804 on Pueblo West’s 2016 property taxes, an effective mill rate of 19.828. Without resident approval, Pueblo West is required to return to residents $81,932, approximately $7.44 per household. While limited in impact to residents at $7.44, $81,932 represents an increased ability of the Metro District to provide much needed services, most notably in road maintenance, parks and recreation programs, and fire protection.
On May 3rd, Pueblo West will ask residents, through a De-Brucing referendum, for the ability to maintain the current, comparatively low mill rate and use those funds for the infrastructure improvements and public programs currently found in our service plan. Pueblo West Board President Jerry Martin, in a clarifying comment, stated “The Metro District is not asking for a tax increase from residents. This is a request to keep the revenue that Pueblo West residents already approved with the existing 20.193 mill levy.”
For questions or concerns, please comment below or contact:
Community Engagement Manager, Pueblo West Metropolitan District