November 2013 Election
Fort Collins Area Chamber Takes Positions on November 2013 Ballot Issues
The Fort Collins Area Chamber of Commerce takes positions on ballot measures that it believes will impact quality of life and economic competitiveness. With mail-in ballots soon to be sent out, the Chamber has taken positions on 3 issues on the fall ballot, including:
City Ballot Issue 2A – A Five Year Moratorium on Hydraulic Fracturing – OPPOSED
State Amendment 66 – An Income Tax Increase Built Into the State Constitution to Fund Public Education – OPPOSED
County Issue 1A – Allow the County to use already collected funds to improve County facilities – SUPPORT
Chamber Opposes City Ballot Issue 2A – A Five Year Moritorium on Hydraulic Fracturing
City of Fort Collins Ballot Issue 2A was petitioned onto the ballot by citizens and calls for a five-year moratorium on the use of hydraulic fracturing within the City of Fort Collins and properties under its jurisdiction to extract oil, gas, or other hydrocarbons and to store and dispose of its waste products. You can read the detailed changes that would be made to the City Code here.
The key issue for the Chamber in analyzing this issue is property rights. Mineral rights owners, and often energy development companies, have long-established rights that cannot be unilaterally eliminated by state or local elected representatives or directly by the public after petitioning a measure onto the ballot and passing it.
The Chamber believes that suspending those property rights with a five-year moratorium is excessive and will be indefensible in court. The argument being used for taking those property rights is that public safety warrants more time for research and study. While we support data-driven and fact-based public policy decisions, moratorium supporters have focused on fear and emotional appeals. No matter what the data says in five years, fracking opponents will still be fracking opponents.
This issue is also about which level of government is best suited to regulate hydraulic fracturing, local or state. In general, the Chamber believes that less government is better and decisions made closer to the people impacted by a statute, tax, fee or regulation are better. But because of legal precedence or technical complexity, some issues are best regulated at a higher level. This is one of them best regulated at the state level.
Some on the City Council and members of the public have argued that passage of this measure will create a significant legal liability for city taxpayers. We appreciate the argument, but in a way we welcome this vote. If Fort Collins voters pass this measure, we believe the issue will ultimately be litigated in favor of the individuals and companies holding the mineral rights. It will be a costly misstep but will have the benefit of bringing legal clarity to an important issue. If the measure passes, it will be a Pyrrhic victory in that it probably won’t survive a court challenge.
The City of Fort Collins has already negotiated and adopted some of the most stringent requirements on oil and natural gas operators in Colorado. This ballot measure adds no benefits while creating liabilities.
Read the Chamber Resolution opposing Fort Collins Issue 2A here.
The Fort Collins Area Chamber of Commerce encourages members to support private property rights by voting against the ballot measure called the Fort Collins Public Health, Safety and Wellness Act (Initative 2A) which would impose a five year moratorium on hydraulic fracturing and the storage of its waste products in Fort Collins.
Chamber Opposes State Amendment 66 Which Would Change the Constitution to Increase State Income Tax Rate to Fund Public Education
After long deliberations during the legislative session, advocates collected signatures to place this measure on the ballot. Amendment 66 amends the Colorado Constitution and the Colorado Statutes to change how the state funds public preschool through twelfth grade (P-12) education. The amendment raises taxes to increase the amount of money available for public schools, changes how the state distributes funding to school districts, and requires that a fixed percentage of revenue from certain state taxes be annually set aside for schools.
As its name indicates, this is an amendment. I in this case, it’s an amendment to the state constitution. Amendment 66:
- Raises the state individual income tax rate from 4.63 percent to 5.0 percent on the first $75,000 of taxable income, and to 5.9 percent on any taxable income over $75,000 (a 27.4 percent increase);
- Deposits the additional tax revenue from the tax rate change into the newly created State Educational Achievement fund;
- Implements legislation passed by the state legislature creating a new formula for allocating state and local funding to school districts;
- Repeals the constitutional requirement that base per pupil funding for public education increase by at least the rate of inflation annually; and
- Requires that at least 43 percent of state income, sales, and excise tax revenue, collected at existing tax rates, be set aside annually to pay for public education.
- Overall state funding for public education in Colorado would increase by 20 percent.
You can read the full text of Amendment 66 here.
The Chamber strongly supports effective, accountable and properly funded public education. The nexus between educational achievement and individual, community, state and national prosperity is undeniable. Anecdotally we see this cause and effect linkage and actual research backs it up. In short, as a society, if we want to thrive economically, we must have strong public education systems.
Businesspeople understand this; the business community wants and needs strong and effective schools. Those students are our children, and someday they will be our colleagues at work. So in addition to understanding how important education is for a prosperous society and our businesses, it’s important for the success of our children. We also know that the values we hold dear regarding individual opportunity, innovation, free enterprise, personal responsibility, and community are best preserved by an informed and educated populace.
This need and expectation of the business community for effective education heightens our disappointment with Amendment 66. After careful review and thoughtful consideration, the Fort Collins Area Chamber cannot support it.
Our opposition arises from issues concerning the size and perpetuity of the tax increase, our belief that more money will not necessarily result in increased educational attainment by Colorado students, how this tax increase would block resources to meet other state priorities, constitutional inflexibility, the inequity of a two-tiered tax increase and the subsequent drag on the economy.
In turn, here are further thoughts on each of the issues listed:
- Size and perpetuity of the tax increase. This is a very big tax increase: state expenditures on public education will jump by approximately 20 percent. Because the tax is not sunset, voters won’t have a good opportunity to hold elected officials and the education community accountable for results. Also, on an individual basis, this is a huge tax increase with the top tier of taxpayers seeing a 27.4 percent increase in their income tax rate.
- Lack of accountability for producing measurable results. For $1 billion more per year forever what improvements can Colorado taxpayers expect in student educational achievement? Asked another way, a decade from now after spending $10 billion more for public education than we are today, what improvements will taxpayers see in student graduation rates, test scores and graduates’ labor market competitiveness? Spending this amount of new money should result in a better educated populace and more productive workforce. Yet no projected measurable results are built in to this proposal. That’s because Amendment 66 is about public education finance reform (how education money is distributed among school districts), getting more money for public education ($1 billion more per year forever) and expanding the reach of public schools (new services like half-day preschool and full-day kindergarten). Proponents have not and cannot make a compelling case that passage of Amendment 66 will result in better educated children. In essence, Colorado taxpayers are being asked to pay substantially more for the same results.
- Inequity of a two-tiered tax increase. We do not support a two-tiered income tax. The higher tier being proposed unfairly impacts small businesses whose incomes are taxed at an individual rate. We strongly oppose a graduated income tax increase which we believe is bad tax policy for our state’s small businesses. This is a compounding impact on business when considering the disproportionate share of property taxes business pay (29% assessment vs. 7.96% assessment) due to the Gallagher Amendment. Why should small business be expected to shoulder a disproportionately higher share of the cost of public education than other Coloradoans?
- Limits resources for other state priorities. Taxpayers have a limit for how much local and state government they are willing to pay for. This ‘ceiling’ is unclear and varies among individuals but at some point taxpayers collectively bump up against that ceiling. A billion tax increase for one area of state government – public education – uses up the available ‘head room’ needed for transportation and higher education. A case can be made that a large tax increase like this will actually hurt the future funding prospects of higher education and transportation. And now, after two years of natural disasters including the need for substantial money to rebuild transportation infrastructure along the Front Range due to flooding, is a large tax increase for public education justifiable in light of other pressing needs?
- Constitutional inflexibility. Building this into the state constitution would be in keeping with a long series of decisions that have tied state government finances in knots. Replacing the automatic cost-of-living increases in Amendment 23 with a guaranteed 43 percent of the state’s general fund revenues in Amendment 66 is not an improvement in that regard. And while the education community benefits by seeing more money from this arrangement, nothing was done in Amendment 66 to address major and growing inequities in property tax assessments created by the Gallagher Amendment. How is building inflexibility and quotas into the state’s constitution wise policy?
- Hurts Colorado’s competitiveness. Colorado will go from having one of the more competitive income tax rates in the Rocky Mountain Region to having the highest.
- Drag on the economy. Our concern here is that, we do not believe this amendment will create a better educated, thus, more productive workforce. It is likely that Amendment 66 will be a net drag on the economy for decades with $1 billion per year being shifted from the productive side of the Colorado economy to the government sector. Those dollars would not be available to invest in private sector activities that create innovation and jobs.
- Impact on Poudre School District is unclear. Neither the school district, nor the Chamber, can discern the impact (positively or negatively) of Amendment 66 on PSD. We cannot support such a monumental tax measure without knowing the impact to our community school district.
The Fort Collins Area Chamber is disappointed that we were not presented with an education measure we could support. We hope Amendment 66 is defeated and that proponents will come back with a measure that is more reasonable, accountable and effective in creating the workforce Colorado deserves.
The Fort Collins Area Chamber of Commerce urges its members to oppose State Amendment 66 because of the size and perpetuity of the tax increase, the belief that more money will not necessarily result in increased educational attainment by Colorado students, how this tax increase would block resources to meet other state priorities, constitutional inflexibility, the inequity of a two-tiered tax increase and the subsequent drag on the economy.
Chamber Supports County Ballot Issue 1A
County Ballot Issue 1A was placed onto the ballot by the county commissioners and asks Larimer County citizens to allow for the already collected funds from a 1997 sales tax to be used to improve County facilities in Loveland. You can read the detailed ballot language here.
The Fort Collins Area Chamber is supporting this county ballot measure as a common-sense use of dollars already collected by the County. The sales tax to fund renovations to county buildings passed in 1997 and expired in 2012. The measure required that all building-related funds be spent specifically on renovations to the existing building in Loveland, not new construction. $8.5 million in sales tax has been collected and the tax expired in 2012. No new taxes would be imposed, this measure simply allows for the use of the funds for a new building – either on the current facility site or elsewhere.
The Fort Collins Area Chamber of Commerce encourages members to support responsible use of government tax dollars and to support Larimer County Ballot Issue 1A.
In summary, the Chamber:
- Opposes local Initiated Issue 2A, which would place a five year moratorium on hydraulic fracturing in Fort Collins,
- Opposes state Amendment 66, which would impose a two-tiered tax system to fund education, and
- Supports county Issue 1A, which allows the County to use already collected funds to improve County facilities.
STATEWIDE ELECTION DAY IS Tuesday, November 5, 2013
Polling places open from 7 a.m. to 7 p.m. with Early Voting beginning October 14, 2013.
Only voters with an active voter registration status will receive a mail ballot. Check your Voter Registration Status at www.larimer.org or call the elections department at (970) 498-7820.
City of Fort Collins Election Site
Larimer County Elections Site
President David May’s Blog
Colorado Blue Book