City of Castle Pines | Special Council Meeting on Proposition 101, Amendment 60, and Amendment 61

Special Council Meeting on Proposition 101, Amendment 60, and
Amendment 61

August 6, 2010

On July 26, at a Special Meeting of City Council for Castle Pines residents, Dee Wisor of Sherman & Howard LLC presented an overview of Proposition 101 and Amendments 60 and 61. These three statewide initiatives have been certified for the November, 2010 ballot by the Colorado Secretary of State and, if passed, will become effective on January 1, 2011.

Each of the three initiatives is likely to have direct and indirect financial impacts on every municipality throughout the state, including Castle Pines North. The exact range of impacts to all Colorado governments as a result of the three initiatives is currently unknown. However, the impact is likely to be significant and include a decrease in revenues and subsequently, the level of services provided.

Summary of Proposition 101: Proposition 101 is a statutory change that will reduce the State income tax, various motor vehicle fees and taxes, and fees on telecommunications services. Proposition 101, if approved by Colorado state voters, will take effect January 1, 2011 and includes the following key provisions.

Vehicles fees and taxes will decrease or be eliminated as follows:

Specific Ownership taxes on motor vehicles must decrease in four equal yearly steps to $2 for new vehicles and $1 for used vehicles.
All registration, license and title charges combined shall total $10 annually, per vehicle.
There will be no State or local taxes on vehicle rentals or leases.
There will be no State or local taxes on the first $10,000 of value of vehicle sales prices; this provision will be phased in equally over four years.
All other State and local charges on vehicles and vehicle uses must cease, except for those fees listed above and tax, fine, toll, parking, seizure, inspections, and new license plate charges.
Any new charges would be deemed to be taxes and thus require a ballot issue.
The 2011 State income tax rate will be reduced from 4.63% to 4.50% and future rates will decrease 0.1% annually, in each of the first ten years that annual income tax revenues net growth exceeds 6% until the rate is 3.5%.
No charge by State or local governments will apply to telephone, pager, cable, television, radio, internet, computer, satellite, or other telecommunication service customer accounts. Any new charges will be deemed tax increases, which will require a vote. Emergency 911 fees are permitted to continue at 2009 rates.

Summary of Amendment 60: Amendment 60 will amend Article X, Section 20 of the Colorado Constitution (TABOR) by adding a section to create new limits, rules and restrictions on property taxes. In summary, this amendment will override previous court decisions interpreting TABOR and revoke prior voter approvals concerning the “debrucing” of property taxes.

Amendment 60, if approved by Colorado state voters, will take effect on January 1, 2011, and include the following key provisions:

Electors may vote on taxes where they own property. Although the term “Elector” is not clearly defined, the provisions of this amendment appears to allow all property owners, whether they live on the property owned or not, to vote on property tax measures included on future ballots. Currently, only registered voters living within the jurisdictional boundaries of a municipality may vote on such measures.
Property tax questions must be voted on separately from related debt questions. Currently under TABOR, debt and related property tax increases are allowed in a single question; the proposed legislation could cause one of the questions to pass while the other question fails. Therefore, a question related to a bond issue could be approved while the question related to the funding for the repayment of the bond issue could fail.
Any future property tax increases will be effective for only 10 years.
All property tax elections must occur in November.
Property tax bills can only list property taxes and late charges. Currently, property tax bills may include other charges, such as special assessments for voter approved projects.
The unelected boards of enterprises and authorities may not levy mandatory fees or taxes on properties.

An extension of an expiring tax is considered a tax increase. This portion of the proposed amendment conflicts with the current TABOR interpretation in that the extension of a current tax is not considered a tax increase. In addition, future tax extensions will have to comply with TABOR’s more restrictive election rules applicable to tax increases.
Enterprises and authorities must pay property tax. Since this will cause an increase in revenue for the taxing entity, mill levy rates must be lowered to avoid windfall revenues.
Prior elections allowing property tax revenues to be retained are no longer in force and future debrucings expire in 4 years.
School districts must phase out one-half of their 2011 tax rates, excluding debt services levies, and the State must backfill the lost revenues.

Summary of Amendment 61: Amendment 61 will amend Article X, Section 20 of the Colorado Constitution (TABOR) by adding a section to prohibit State debt and limit local government debt. In summary, this amendment will change the manner in which both the State and local government may incur debt, and applies to any loan, regardless of the term of the loan.

Amendment 61, if approved by Colorado state voters, will take effect on January 1, 2011 and include the following key provisions:

The proposal applies to any loan, regardless of the term of the loan. Therefore, the proposed amendment will apply to all operating and capital leases.
Local governments and their enterprises, authorities, and other local political entities may borrow money, but only after a November vote. All local government borrowings are subject to voter approval and the ballot title must specify the use of the funds, which cannot be changed.
For entities other than enterprises, there will be a debt limit of 10 percent of the assessed taxable value of the real property in the jurisdiction.
Any new borrowing has to be in the form of bonded debt, be subject to prepayment without penalty, and mature within 10 years.
No borrowing may continue past its original term.
When a borrowing is repaid, tax rates must decline in an amount equal to its planned average repayment, even if the debt is not repaid from taxes.

All methods of borrowing that were not currently considered debt according to TABOR now require voter approval.

There was significant discussion on the potential impacts of these initiatives upon the citizens of Castle Pines North, including possible closure of the library. Please get informed on these initiatives and their impacts and be sure to VOTE!

You are also encouraged to attend a Douglas County Community Forum on this issue to be held August 11, 6 p.m., at the Wildlife Experience, 10035 South Peoria in Parker. Everyone needs to educate themselves on the potential impacts these initiatives can have on our economy, local services, law enforcement, emergency services, roads, parks, schools, water projects, and so much more.At this forum you will hear from both sides of the issue.

Also please join us for the Castle Pines CERT monthly meeting and learn how you can help your family, friends and neighbors in an emergency. Meetings are held the first Tuesday of every month at 7 p.m., at HOA 1 Clubhouse.