On your ballots this November is issue 2A, which would permanently remove the TABOR revenue cap. We have heard the arguments put forth by various Council members during the Council meetings and concluded that none of those arguments made sense. Those arguments were…

The declining revenue argument goes like this, “sales tax revenues have gone down $1 million since (pick a year), therefore we need to de-TABOR.” This argument is flawed for two reasons.

The first is that the TABOR revenue cap is adjusted up each year; you can’t have declining revenues and at the same time be in danger of exceeding a revenue cap that is going up each year. The second flaw is that the total revenues for the City haven’t declined, no matter what year you pick as the starting point.

The new development argument is, “all sorts of new development is scheduled to be built in Littleton, and if we don’t de-TABOR we can’t keep the revenue those developments would generate.”

This is a strange argument for the Council to make during the middle of a re-write of the Comprehensive Plan aimed specifically at fixing the supposed lack of economic development in Littleton. If revenues are increasing so fast that we are in danger of exceeding the revenue cap, why are we as a City talking about tearing down existing shopping and commercial properties and replacing them with high density and mixed use residential to spur revenues? It doesn’t make sense.

The Open Space Tax argument is, “Arapahoe Open Space Tax is $784,000 and is in danger of putting us over the revenue cap, and if we go over the cap we have to refund the money out of the General Fund.” The revenue cap for 2005 is more than $47,000,000. Revenue is booked into the City under more than 130 line items in the budget. To claim that one line item, consisting of less than 1/70 of the City’s revenue will cause the City to exceed the revenue cap is absurd. Plus there is no requirement that the City refund TABOR money only out of the General Fund; TABOR says the City can use any reasonable method to refund the money. This argument is false on all sides.

The flexibility argument is, “we need to permanently remove the revenue cap in order to have flexibility to plan for the future.” This also is false. The City needs about $1 million more in revenue each year to stay abreast with raising wages and increasing costs such as health care and fuel. The TABOR revenue cap has gone up more than that amount for 13 of the last 14 years. (2003 was the one year that the cap did not increase by that amount but neither did the City’s revenues, so there was no revenue cap problem that year.) On the other hand the few years that the City did exceed the revenue cap the excess ranged from as little as $240,000 to more than $4.5 million in a single year.

The City Council should plan on staying within the revenue cap. Any potential excess TABOR revenue that is collected should be used to pay down debt or spent on special projects the citizens approve, not on routine government expenses. Past experience has shown that excess revenue is unpredictable; planning on using excess revenue to pay off debt or hire new employees is extremely foolish. Removing the permanent TABOR revenue cap to enable this practice is wrong.

The not a tax increase argument says, “since this is not a tax rate increase it is not a tax increase.” Hogwash. All revenue that the City gets comes from the citizens – it doesn’t fall from heaven. If you cancelled your cable service and the cable company continued to bill you, you wouldn’t say, “its OK because it isn’t a rate increase.” We realize that it isn’t practical to stop collecting taxes part way through the year. But it is possible to use the excess revenue in a way that reduces your total tax burden. The City Council could apply excess revenue toward your sewer bill and thereby reduce the amount of money that you pay the City; it doesn’t need an election to do that.

We want to make it clear that we do not oppose all TABOR revenue overrides. We have supported specific limited TABOR overrides in the past. And will do so again when the time limit and uses of the money are appropriate. But this election is not about a limited TABOR override; it is permanent and it does not specify the uses of the money. There is no valid reason for this override. We urge you to vote no on 2A.

Tom Mulvey
Doug Clark