Raw Politics: November Ballot Will Be Jam-Packed

Plus, Thoughts On City Leadership

For Denverites, the November ballot will be crowded with questions that have the potential to significantly change the nature of the community. How you choose may also significantly impact your family’s finances.

The following is a snapshot of some of the proposals, with analysis and thoughts about a mayoral race at the end of this column.

Initiative 93 – The Quality Education Fund

This is a proposed constitutional amendment to the Taxpayer’s Bill of Rights (TABOR) to create a fund to support additional funding for PreK-12 education.

As proposed, the initiative would increase funding over 2018-2019 levels to the statewide base per-pupil funding for PreK-12 public education to no less than $7,300. It would increase state funding by at least $120 million for special education; $10 million for gifted and talented programs; $20 million for English language proficiency programs; and $10 million for preschool funding. All of these increases are to be indexed to inflation.

The measure would raise residential property tax assessments to 7 percent of the actual value and 24 percent of actual value for all other property, except oil and gas property, by increasing income tax rates. The proposed increases would impact households with incomes higher than $150,000. Households that have an income of less than $150,000 would not see a tax increase.

The additional funds generated, estimated at $1.6 billion as of fiscal year 2019-2020, would be deposited into a “Quality Education Fund” for appropriation by the Colorado General Assembly to school districts. The rules would remain in place until a new school finance act is approved that meets certain standards. The initiative appears to give complete discretion to the school boards on how the funds are to be spent. Expect to hear a lot on this significant tax increase on higher wage earners.

Initiative 126 – Payday Loans

This measure seeks to limit the finance charge on so called “payday loans” to a maximum annual percentage rate of 36 percent while eliminating all other financing charges and fees associated with payday lending. The initiative also expands the language that constitutes unfair or deceptive trade practices for payday lending activity. The industry has challenged this proposal with a motion for rehearing that as of press time has yet to be resolved.

Initiative 97 – Oil and Gas Setbacks

This continues the battle between the oil and gas industry and the environmental interests by expanding the setback requirements – how far exploration activities must be from a home, school or other structure. If approved by voters, the measure would increase the set- back of gas and oil wells to 2,500 feet; allows communities to create greater setbacks; and allows that if neighboring and overlapping jurisdictions have conflicting setbacks, the larger setback will apply. Since 2013, the required setback has been 500 feet from a home or other occupied building and 1,000 feet from high-occupancy buildings such as schools, health care institutions, prison facilities, and childcare centers, as well as neighborhoods with at least 22 buildings. It is estimated that the current 500-foot setback blocks oil and gas development on about 18 acres surrounding a set point. And, the 1,000-foot setback blocks development on about 72 acres. The proposed expanded setback to 2,500 feet will block development on about 450 surrounding acres. It is also clear that the proposal will decrease state and local government tax revenues. If history is any indication, this initiative will likely generate the greatest number of television commercials and campaign spending.

Competing Transportation Measures: #153 and #167

There will be two competing transportation funding initiatives on the ballot. Initiative #153, sponsored by the Denver Metro Chamber of Commerce, increases the state sales and use tax rate from 2.9 percent to 3.52 percent between Jan. 1, 2019 and Jan. 1, 2039. The initiative also allows the Colorado Department of Transportation (“CDOT”) to issue bonds totaling up to $6 billion starting in fiscal year 2018-19. The total repayment cost may not exceed $9.4 billion over 20 years. The additional tax dollars from the tax increase are allocated at 45 percent for bond repayment and state transportation funding; 15 percent for multimodal transportation; and 40 percent for municipal and county transportation projects. A citizen oversight commission created by the initiative must annually report how the bond proceeds have been used. It is estimated that the initiative will increase state sales and use tax revenue by $366 million in fiscal year 2018-19 and $766.7 million in fiscal year 2019-20.

To pay for all of this, the initiative increases the sales and use tax rate 0.62 percent (from 2.9 percent to 3.52 percent) starting Jan. 1, 2019. Based on the March 2018 Colorado Legislative Council Staff revenue forecast, this will increase state sales and use tax revenue by $366 million in fiscal year 2018-19 and $766.7 million in 2019-20 and the increases will continue through 2039-40. The initiative stipulates that the new funds be allocated between the State Highway Fund, the newly-created Multimodal Transportation Options Fund to increase funding on projects such as bike paths, walking paths, and mass transit, and the newly-created Local Transportation Priorities Fund for county and municipal transportation projects.

Competing Initiative #167, sponsored by the Independence Institute, requires the executive director of CDOT to issue Transportation Revenue Anticipation Notes (TRANs) no later than July 1, 2019, in a maximum amount of $3.5 billion with a maximum repayment cost of $5.2 billion over 20 years. TRANS and their proceeds do not require voter approval under TABOR, and must be used exclusively for road and bridge expansion, construction, maintenance, and repair only on the specific 66 projects identified in the measure. Transit projects are specifically excluded from the list. The initiative requires the principal and interest on the borrowed money to be paid without any raising of taxes or fees. Further, the state is required to the right to repay the TRANs ahead of schedule without penalty.

Where the rubber meets the roads

Both transportation measures are flawed. The sales and use tax increase in #153 is regressive and most significantly impacts Coloradans that earn less. A gas tax or graduated income tax increase would have been less regressive.

The state’s budget will be significantly impacted by the funding mandate of #167 since no new revenue source is mandated. In other words, the transportation funding required by the measure will require diverting funds from programs currently receiving money. Significant budget cuts in other areas will be required to place road construction – remember transit is not included – as a priority over all other funding.

Will Penfield Tate run for mayor?

Finally – and this is what my editor calls ‘burying the lead.” Many have asked about my future plans.

Over the past several weeks I’ve received calls and emails from a cross section of Denver citizens – all asking me to consider a race for Mayor of Denver next year.

Some of those who have reached out are friends, however many are people I do not know well. They have shared their concerns about the condition of our city and our future. I have spent a career working on making Denver a better home and place for all of us to live, work, and to raise a family.

Because I am listening and asking questions doesn’t mean I am running for an office. It does mean I am interested in the future of this city and the people who call Denver home.

Stay tuned. It’s time for all of us to get ready for school.

Penfield W. Tate III is an attorney with Kutak Rock and serves on a number of nonprofit boards. He represented Park Hill in the Colorado House of Representatives from 1997 to 2000, and in the State Senate from 2001 to February 2003, when he resigned from the Senate to run for Mayor of Denver. Penfield’s adult daughter was born and raised in Park Hill, and he and his wife Paulette remain in the neighborhood.