Opinion: Progress on Boulder’s tax issues


On Tuesday night the City Council had a useful discussion on possible sales tax ballot items for the open space and transportation departments and the general fund. Their discussions yielded significant improvements over the proposal that was floated at previous meetings. And many council members have finally acknowledged that there are some serious problems coming for the city’s transportation system that are not going to be solved by a few million additional dollars a year. Paramount of these is dealing with the impacts of growth and shifting funding to some form of user fee.
But there was still the vestige of the idea that, just because Boulder voters re-approved in 1997 a 0.33 percent sales tax for open space, now set to expire in 2018, that they will meekly accept a new 0.33 percent sales tax that is partially for other purposes. Boulder voters are much more focused on how their money will be spent and whether there is real value to be gained, than whether the new taxes add up to the old tax rate. Basing a ballot issue on third-grade math — “What numbers add up to .33?” — will have almost no sway with the voters.
Mayor Matt Appelbaum put forward a proposal that could potentially provide open space with adequate funds – a temporary 0.22 percent sales tax to fund capital acquisitions reducing to a permanent 0.10 percent tax increase to handle the increased operations and maintenance, a critical long-term need. (By the way, sales tax is the only realistic way to fund open space.) The right way to do this is to set the tax rate high enough and term long enough to support borrowing the money needed to do the planned purchases now, while prices are still relatively depressed and interest rates relatively low. Then the tax rate can be tapered off and/or the term shortened if revenues come in higher than expected. The mistake would be to commit to too low an initial tax rate or to set specific tax rate reductions for specific years. The bond underwriters will see these simply as revenue reductions. This will force them to decrease the total amount of bonds being issued, thereby preventing Boulder from making the purchases necessary to preserve ecosystems, create regional trails, support urban agriculture, and buy out oil and gas development rights.
Also proposed was a five-year 0.15 percent sales tax to temporarily fund the Transportation Department’s backlog of maintenance needs, and hopefully fund the work necessary to come up with some more permanent solutions. Using sales tax for long-term transportation funding is neither equitable nor efficient: Governmental entities, a substantial portion of Boulder’s transportation demand, are exempt; and sales tax is not tied to driving, so it provides no incentive effect.
The bigger problem is providing long-term solutions to the growth-related impacts to the transportation system. Driving on 28th Street or Arapahoe during rush hour provides a glimpse into what the future will look like -multiple light cycle waits, huge amounts of wasted time, and unnecessary burning of fossil fuels with resultant excess pollution and CO2 emissions. The current master plan is inadequate (both in planning and funding) to even deal with current traffic levels, much less the massive amount of growth projected to “reasonable build-out.” A serious ballot proposal would include commitments to (1) apply Fort Collins’ “Adequate Public Facilities” approach to Boulder’s goal of preventing growth-related increases in congestion and vehicle use, (2) fix the EcoPass pricing system so it is based on actual costs so we can afford a free bus system, and (3) shift to user fees for funding transportation operations and maintenance. A lot of companies want to work with Boulder to do innovative user fees; the staff and Transportation Advisory Board need to bring them in.
Rather than yet another tax increase for the general fund, the council should start by divvying up the current revenue stream, so departments can plan and would not have to compete each year for funds, which has led to “use it or lose it” budgeting; this will save everyone money. The city needs to bring current the parks and library master plans, so the city’s consultants will approve impact fees adequate to fund the necessary capital improvements. Finally, providing open space adequate operations and maintenance funding would allow the current $1.2 million transfer from the general fund (that was to cover mountain parks) to go back to these other departments.


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