There were many local initiatives/bond issues not just in the front range but throughout the state. I was surprised by the rate of passage of these ballot questions. What city enacted a tax of 18.4%? What major items passed throughout the state? In a nutshell, taxes are going up substantially in many areas. How is this possible with the TABOR amendment that caps property tax increases? What are the biggest initiatives throughout the state?
Denver:
- 1 Billion bond initiative: First, If you live in Denver, hang on to your saddle! Two major ballot items were approved. First, voters approved a 1-billion-dollar bond package. Ironically this was advertised as “not increasing taxes”. On the surface this is correct, but as property values increased taxes increased. Under the gallager and Tabor amendments, government spending is capped. The bond initiatives basically increased the mill levy (or stopped the mill levy from dropping) therefore increasing the revenue for the city. Here is an interesting article on Tabor (Colorado Department of Education)
- Green Roof initiative: I was surprised that this looks like it is going to pass. It requires green roofs on all new buildings along with remodels. On the surface it sounds like an intuitive initiative; a green roof sounds nice! The devil is in the details. An average green roof costs 20-35/ft as opposed to a conventional roof that costs under 5/ft. Assume you had a 100k foot building you were constructing for Walmart. The roof originally costs 500k, under the new plan the roof would now cost 2m. Somebody is going to pay for the increase in costs. Rents will no doubt go up to at least break even on the increased costs
Brighton:
- Ballot 301: require city officials to consider public health impacts when approving oil/gas drilling: Basically this initiative gives the city the broad latitude in setbacks and other measures that could impact health. Although this is destined for litigation in the courts, its passage was interesting since the oil and gas spent considerable money trying to defeat it.
Grand Junction:
- Ballot 3a &B: This totaled 126 million (mill and bond overrides) for a new school and various other educational needs
Fort Collins:
- Ballot 2B: Allows the city of Fort Collins to build out its own high speed internet and create a telecommunication utility (Coloradoan); the goal is to provide high speed service of up to 1 gig per second throughout he city.
Crested Butte:
- Ballot 2A Vacation Rental Tax: This would levy an additional 5% tax on vacation rental which would be allocated towards affordable housing initiatives. The margin this won is astounding. 80% voted in favor of this tax. This would bring the total tax on vacation rentals to 18.4%! This is a pretty high tax to say the least.
El Paso County
- Ballot 1A: This would allow I 25 to be widened between castle rock and monument, paid for in part by property owners. It essentially kept taxes the same so that excess wasn’t refunded to property owners due to Tabor
All in all, Colorado was in a spending mood last night approving billions in new spending initiatives. I was surprised at how easily many of these initiatives passed. It reflects how well the Colorado economy has improved over the last 10 years. Many of the increases were for schools which were in dire need of funding. Unfortunately, these new initiatives will start flowing through to your mailbox in the form of tax bills in the coming year. The higher taxes will have a byproduct of making housing even more expensive in many areas.
Written by Glen Weinberg, COO/ VP Fairview Commercial Lending. Glen has been published as an expert in hard money lending, real estate valuation, financing, and various other real estate topics in the Colorado Real Estate Journal, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.
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