Loveland - August 17, 2011
The Loveland City Council approved on second reading last night the final language for a ballot measure to suspend TABOR (Taxpayer's
Bill of Rights) spending limits for the City of Loveland until December 31, 2024. Municipal spending limits were created by TABOR, a
state constitutional amendment, when it was passed by Colorado voters in 1992. Loveland voters previously passed measures to exempt
Loveland from those limits but only for limited periods of time.
In early April Loveland Councilwoman Carol Johnson raised the prospect of a permanent override of TABOR spending limits (she called
"a permanent de-Brucing of Loveland") being placed on November's ballot. Johnson's permanent TABOR spending limit override ballot
language barely passed on first reading August 2, 2011 by a razor thin 5-4 vote. Mayor Gutierrez along with Councilors Heckel, Solt,
Shaffer and Johnson voted down an amendment by Councilman Daryle Klassen to sunset the new extension in 10 years. Klassen
offered his proposed change only as an amendment on advice from Mayor Gutierrez as the proper way to attempt changing the
proposed ballot language.
Clever Parliamentary Move & Growing Community Resistance
In a clever parliamentary move last night, Councilman Hugh McKean moved approval of the TABOR spending limit override ballot
measure on second reading but only if it expires on December 31, 2024. Unlike Klassen's amendment two weeks earlier, McKean
moved to pass the proposed TABOR ballot language in the same motion he proposed the alternative language. This time Councilman
Heckel, who voted against Klassen's sunset amendment two weeks earlier, voted to support McKean's alternative draft with the sunset
provision thus gaining the 5 votes necessary to pass the measure with a sunset clause all in a single vote. Mayor Gutierrez along with
Councilors Johnson, Shaffer and Solt who passed the ballot measure two weeks ago after defeating Klassen's amendment all voted no
last night to McKean's motion but found themselves on the losing end of the vote.
McKean's motion came after three residents questioned the wisdom of permanent "de-Brucing" of Loveland during public comments to
council. First to speak was Neil Spooner who described a permanent override as the "worst option" because Loveland voters would not
be able to vote on the issue ever again. He also addressed council comments that citizens could later easily petition to change the
override by describing that option as unlikely given what he described as well funded special interests in the community opposed to
TABOR.
Following Spooner was Debra Elliot who also spoke in opposition to the ballot language as presented. Jenifer Travis, a board member of
the Loveland Chamber of Commerce and CFAC (Community Finance Advisory Commission) member spoke in favor of placing a
TABOR spending limit override on the ballot but said she was indifferent about the length of any sunset provision. Travis said she felt
the chances of passage were greater if it contained a sunset provision and even invoked the name of fellow CFAC member and candidate
for City Council Ward IV, Ralph Trenary, as not favoring the permanent nature of the ballot language because he believes it jeopardizes
its success at the ballot box.
Trenary's opponent in Ward IV, former Loveland Mayor Pro Tem Dave Clark, told LovelandPolitics earlier this week he would not be
supporting the TABOR override ballot measure if the override remained permanent instead of temporary. Like Travis, Clark is also a
member of CFAC and on the Loveland Chamber of Commerce Board of Directors. His opponent, Ralph Trenary, is a longtime opponent
of TABOR taxing and spending limits so is likely to support any suspension of TABOR whether it be temporary or permanent.
What Spending Limits In TABOR And Why?
McKean began his comments by paying homage to supporters of TABOR in the audience by declaring, "I am a TABOR fan. I'll tell you
this, I love TABOR." McKean also apologized to Neil Spooner for not returning his call earlier in the day before explaining why he
believed suspending TABOR is necessary, at least temporarily, for the good of the community.
According to TABOR which is Section 20 of Colorado's State Constitution, the intent of the limits placed on spending "shall
reasonably restrain most the growth of government." A formula is provided in TABOR for allowing growth in government
spending commensurate a community's growth in population and inflation. However, no provision is made for situations where a local
government has a drop in revenue one year, thus decreased spending, and tries to spend more than inflation or population growth the
following year when revenues recover from the previous year's decline.
Using this example, most cities in Colorado have passed ballot measures exempting themselves from the spending limits in TABOR to
avoid any mandatory payback to taxpayers when revenues exceed allowed expenditures. Loveland's ballot language provides ample
assurance to voters that by overriding spending limits they are not authorizing suspending the parts of TABOR that prevent local
government from raising general taxes without seeking taxpayer approval via the ballot box.
Tax Rebate Language Missing From Ballot Measure Language Approved By Council
What Loveland's TABOR spending limit override ballot measure does fail to do is inform the voter what they are giving-up by approving
the override. The remedy for any year when the city receives revenues in excess of the spending limits is to refund the excess amount
to taxpayers.
Councilwoman Joan Shaffer argued for the permanent suspension of TABOR because, she said, "the people I spoke with didn't vote for
TABOR in the first place." In addition, Shaffer argued that TABOR requires that taxes collected in excess of what the city is allowed to
spend must be equitably distributed back to those people who paid the taxes. Therefore, she argued, the city could not possibly comply
as so many sales taxes collected in the city are paid by people who live outside Loveland. She argued there was "no feasible" way the
monies could ever be refunded as required.
Mayor Gutierrez joined Shaffer in this argument by later also questioning whether a refund of any taxes would even be possible.
Councilwoman Donna Rice later contradicted these comments by explaining that city staff told her it was feasible to which Mayor
Gutierrez interrupted that he was told something very different by staff. Gutierrez asked for "one of the two Johns" (either John Duval,
city attorney or John Hartman, city finance) to come before council and tell them whether any city had complied with the rebate
provisions of TABOR.
Hartman explained to the council that Ft. Collins did provide such rebates shortly after TABOR passed. He said the amount was minor
so it was deducted from city water or electric bills. City Attorney John Duval confirmed Rice's assertion that refunds are viable under
TABOR and suggested Loveland could provide such rebates by way of a reduction in electric bills since most residents receive one.
Whether the city would need to identify the actual taxpayers (like shoppers coming from outside the city) before a refund could be
implemented is addressed in the following language in TABOR:
Refunds:
districts may use any reasonable method for refunds under this section, including temporary tax credits or rate reductions. Refunds
need not be proportional when prior payments are impractical to identify or return.
The Loveland City Council approved on second reading last night the final language for a ballot measure to suspend TABOR (Taxpayer's
Bill of Rights) spending limits for the City of Loveland until December 31, 2024. Municipal spending limits were created by TABOR, a
state constitutional amendment, when it was passed by Colorado voters in 1992. Loveland voters previously passed measures to exempt
Loveland from those limits but only for limited periods of time.
In early April Loveland Councilwoman Carol Johnson raised the prospect of a permanent override of TABOR spending limits (she called
"a permanent de-Brucing of Loveland") being placed on November's ballot. Johnson's permanent TABOR spending limit override ballot
language barely passed on first reading August 2, 2011 by a razor thin 5-4 vote. Mayor Gutierrez along with Councilors Heckel, Solt,
Shaffer and Johnson voted down an amendment by Councilman Daryle Klassen to sunset the new extension in 10 years. Klassen
offered his proposed change only as an amendment on advice from Mayor Gutierrez as the proper way to attempt changing the
proposed ballot language.
Clever Parliamentary Move & Growing Community Resistance
In a clever parliamentary move last night, Councilman Hugh McKean moved approval of the TABOR spending limit override ballot
measure on second reading but only if it expires on December 31, 2024. Unlike Klassen's amendment two weeks earlier, McKean
moved to pass the proposed TABOR ballot language in the same motion he proposed the alternative language. This time Councilman
Heckel, who voted against Klassen's sunset amendment two weeks earlier, voted to support McKean's alternative draft with the sunset
provision thus gaining the 5 votes necessary to pass the measure with a sunset clause all in a single vote. Mayor Gutierrez along with
Councilors Johnson, Shaffer and Solt who passed the ballot measure two weeks ago after defeating Klassen's amendment all voted no
last night to McKean's motion but found themselves on the losing end of the vote.
McKean's motion came after three residents questioned the wisdom of permanent "de-Brucing" of Loveland during public comments to
council. First to speak was Neil Spooner who described a permanent override as the "worst option" because Loveland voters would not
be able to vote on the issue ever again. He also addressed council comments that citizens could later easily petition to change the
override by describing that option as unlikely given what he described as well funded special interests in the community opposed to
TABOR.
Following Spooner was Debra Elliot who also spoke in opposition to the ballot language as presented. Jenifer Travis, a board member of
the Loveland Chamber of Commerce and CFAC (Community Finance Advisory Commission) member spoke in favor of placing a
TABOR spending limit override on the ballot but said she was indifferent about the length of any sunset provision. Travis said she felt
the chances of passage were greater if it contained a sunset provision and even invoked the name of fellow CFAC member and candidate
for City Council Ward IV, Ralph Trenary, as not favoring the permanent nature of the ballot language because he believes it jeopardizes
its success at the ballot box.
Trenary's opponent in Ward IV, former Loveland Mayor Pro Tem Dave Clark, told LovelandPolitics earlier this week he would not be
supporting the TABOR override ballot measure if the override remained permanent instead of temporary. Like Travis, Clark is also a
member of CFAC and on the Loveland Chamber of Commerce Board of Directors. His opponent, Ralph Trenary, is a longtime opponent
of TABOR taxing and spending limits so is likely to support any suspension of TABOR whether it be temporary or permanent.
What Spending Limits In TABOR And Why?
McKean began his comments by paying homage to supporters of TABOR in the audience by declaring, "I am a TABOR fan. I'll tell you
this, I love TABOR." McKean also apologized to Neil Spooner for not returning his call earlier in the day before explaining why he
believed suspending TABOR is necessary, at least temporarily, for the good of the community.
According to TABOR which is Section 20 of Colorado's State Constitution, the intent of the limits placed on spending "shall
reasonably restrain most the growth of government." A formula is provided in TABOR for allowing growth in government
spending commensurate a community's growth in population and inflation. However, no provision is made for situations where a local
government has a drop in revenue one year, thus decreased spending, and tries to spend more than inflation or population growth the
following year when revenues recover from the previous year's decline.
Using this example, most cities in Colorado have passed ballot measures exempting themselves from the spending limits in TABOR to
avoid any mandatory payback to taxpayers when revenues exceed allowed expenditures. Loveland's ballot language provides ample
assurance to voters that by overriding spending limits they are not authorizing suspending the parts of TABOR that prevent local
government from raising general taxes without seeking taxpayer approval via the ballot box.
Tax Rebate Language Missing From Ballot Measure Language Approved By Council
What Loveland's TABOR spending limit override ballot measure does fail to do is inform the voter what they are giving-up by approving
the override. The remedy for any year when the city receives revenues in excess of the spending limits is to refund the excess amount
to taxpayers.
Councilwoman Joan Shaffer argued for the permanent suspension of TABOR because, she said, "the people I spoke with didn't vote for
TABOR in the first place." In addition, Shaffer argued that TABOR requires that taxes collected in excess of what the city is allowed to
spend must be equitably distributed back to those people who paid the taxes. Therefore, she argued, the city could not possibly comply
as so many sales taxes collected in the city are paid by people who live outside Loveland. She argued there was "no feasible" way the
monies could ever be refunded as required.
Mayor Gutierrez joined Shaffer in this argument by later also questioning whether a refund of any taxes would even be possible.
Councilwoman Donna Rice later contradicted these comments by explaining that city staff told her it was feasible to which Mayor
Gutierrez interrupted that he was told something very different by staff. Gutierrez asked for "one of the two Johns" (either John Duval,
city attorney or John Hartman, city finance) to come before council and tell them whether any city had complied with the rebate
provisions of TABOR.
Hartman explained to the council that Ft. Collins did provide such rebates shortly after TABOR passed. He said the amount was minor
so it was deducted from city water or electric bills. City Attorney John Duval confirmed Rice's assertion that refunds are viable under
TABOR and suggested Loveland could provide such rebates by way of a reduction in electric bills since most residents receive one.
Whether the city would need to identify the actual taxpayers (like shoppers coming from outside the city) before a refund could be
implemented is addressed in the following language in TABOR:
Refunds:
districts may use any reasonable method for refunds under this section, including temporary tax credits or rate reductions. Refunds
need not be proportional when prior payments are impractical to identify or return.
| McKean Changes Ballot Language on Suspending TABOR |
LovelandPolitics.com
| Loveland TABOR Ballot Language for Election November 1, 2011 ISSUE NO._____: AUTHORIZING THE CITY OF LOVELAND TO COLLECT, RETAIN AND SPEND FOR THE PURPOSES OF POLICE AND FIRE, STREET CONSTRUCTION AND MAINTENANCE, AND PARKS CONSTRUCTION AND MAINTENANCE, ALL CITY REVENUES IN EXCESS OF THE SPENDING, REVENUE AND OTHER LIMITATIONS IMPOSED BY ARTICLE X, SECTION 20 OF THE COLORADO CONSTITUTION. P . 94 “WITHOUT CREATING OR IMPOSING ANY NEW TAX OR INCREASING THE RATE OF ANY EXISTING TAX, SHALL THE CITY OF LOVELAND, COLORADO BE PERMITTED, IN 2013 AND EACH YEAR THEREAFTER UNTIL DECEMBER 31 2024, TO COLLECT, RETAIN AND SPEND ALL CITY REVENUES IN EXCESS OF THE SPENDING, REVENUE AND OTHER LIMITATIONS IMPOSED BY ARTICLE X, SECTION 20 OF THE COLORADO CONSTITUTION, WITH SUCH EXCESS REVENUES TO BE USED FOR POLICE AND FIRE, STREET CONSTRUCTION AND MAINTENANCE, AND PARKS CONSTRUCTION AND MAINTENANCE? NOTE: Red text to be removed while blue underlined text will be added as the result of last night's vote 5-4 vote. |
| Councilwoman Carol Johnson |
| Councilman Hugh McKean |
|
| Votes Record on TABOR Ballot Sunset Clause (prevailing side shaded in gray) |