The Fog of Tax Increases Part Two – Pagosa Daily Post News Events & Video for Pagosa Springs Colorado

Read the first part

The Pagosa Springs City Council engaged in a heated conversation yesterday, around a single issue.

Should the Council support a $6.5 million sales tax increase ballot measure originally proposed by Archuleta County Executive Derek Woodman a few years ago? month?

By a vote of 4 to 2, the Council agreed to support the ballot measure.

$6.5 million is only an estimate of tax increase recoveries, for the first year. Maybe more, maybe less. But if the $6.5 million estimate is correct…and if inflation in America stays around 8%…well, that could represent a big change in government, over the next 10 years.

According to my pocket calculator – and based on the current rate of inflation – this proposed sales tax increase would, over the next 10 years, extract approximately $94 million from the general public and route to county and city bank accounts. At a more “normal” inflation rate of 3%, the proposed tax hike would total $74 million over the next decade.

The timing of the Council’s discussion was important, as the Archuleta County Board of Commissioners is expected to make a decision on the proposed ballot measure at its regular meeting on Tuesday, September 6 at 1:30 p.m.

As currently proposed, the tax would be perpetual. The County could have proposed a tax that would “die off” after a few years, to give voters more control. But maybe the County doesn’t trust us?

This is a relatively simple process for proposing a tax increase, whether temporary or permanent. But when a county sales tax is perpetual, it’s nearly impossible for voters to get rid of it.

Ahead of yesterday’s Council vote, Mayor Shari Pierce – one of the Council members who ended up voting to go ahead with the proposed tax increase – invited the public to comment on the matter.

But first, City Manager Andrea Phillips gave council an overview of all the ways the city government could spend its share of the money. Which, according to my calculations, could be between 40 and 45 million dollars over the next 10 years?

Next, local activist and former city council member Mark Weiler rose to address the council.

“Thank you, Mr. Mayor and members of council, for giving me the opportunity to share some thoughts with you.

“Number one. What I’d like you to consider doing is using the internet, with this search phrase: ‘Impact of sales tax increase on low- and middle-income families.’ Probably the most respected in the business world is Bloomberg, and I think you’ll find writing there about the devastating effects of higher sales taxes on low- and middle-income families.

“Number two. What I would like you to consider is what increase in sales tax collections has the City enjoyed in the twenty years I have been here. Knowing that your current budget is $10 million, generated by sales tax revenue, it’s really staggering, compared to what it was when I came here.

“Number three. The most significant change in sales tax revenue occurred as a result of the Supreme Court’s ‘Wayfair’ decision, which required businesses to collect sales tax based on the location of their business. purchase. You’ve had a massive increase in your income, here in the City…”

I’m going to interrupt Mr. Weiler here to clarify that statement. In 2018, the United States Supreme Court upheld the right of the state government of South Dakota to collect sales tax on internet sales, and subsequently many other states – including Colorado – began to require that sales tax be paid on Internet purchases, and remitted to state and local governments. Paid by the consumer, of course.

In 2018, the city of Pagosa Springs received sales tax only on local purchases, amounting to approximately $5.1 million.

In 2022, the city expects to earn $8.8 million from purchases made in Pagosa, as well as Internet sales made by people having their purchases shipped to a location in Pagosa.

Mr. Weiler continued.

“The next thing I want you to consider. When you say we’re only talking about a 1.5% sales tax increase, my fellow lawyers use a polite term: Dishonest. A polite term, to tell a lie. The actual increase you are looking at is 37.5%.

“37.5% cost increase for low- and middle-income citizens of Pagosa Springs. I find this unacceptable. I think you should too.

“The last thing I would like to point out is that one of our county commissioners was quoted by the [Pagosa Springs SUN newspaper] saying, “The voters are responsible for putting us in a very difficult financial situation, because they rejected our request – twice – for a sales tax increase.”

“That is not an accurate statement. The commissioners have put the citizens in a terrible financial situation by not paying attention to the opinions of the citizens. »

I’m going to interrupt Mr. Weiler again here to clarify that last comment. In 2017, and again in 2018, the Archuleta County Board of Commissioners proposed a 1% sales tax increase to fund a new county jail and “justice center.” Both times voters rejected the plan and the sales tax increase. The BOCC then went ahead and built the jail and justice center anyway, using “certificates of participation”…and putting the county taxpayers in “a terrible financial situation” (to use the words by M. Weiler).

Mr. Weiler continued his comments.

“I think the city of Pagosa Springs has always been the leader in Archuleta County. It wasn’t the county commissioners. And I understand the county commissioners’ desire for more revenue, to cover up their past mistakes. But I urge you not to be complicit in this.

Mr. Weiler was not the only person to urge the Council to refrain from supporting a ballot question on the 2022 sales tax increase. The most telling analysis of the many reasons for that this proposal was inappropriate came from Council member Brooks Lindner.

I believe that Mr. Lindner is the only Board member who has been instrumental in bringing about a successful tax increase here in Pagosa Springs, which he did during his tenure on the Archuleta School Board. This two-year process involved many community gatherings and a well-organized marketing campaign.

It also meant, ultimately – at the end of this process – a significant reduction in the amount of the tax increase that the school district was asking the community for.

Even here in “financially conservative” Archuleta County, the ballot measure passed by a healthy margin.

We will hear Mr. Lindner’s appeal to his fellow Council members in Part 3 on Monday…

Bill Hudson

Bill Hudson began to share his opinions in the Pagosa Daily Post in 2004 and cannot break this habit. He says that in Pagosa Springs, notices are like vans: everyone has one.

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