County budget advisers recommend crediting taxpayers
As Colorado Springs looks at a menu of new fees and taxes on jobs, cigarettes, liquor and cars, El Paso County is focused on the blue-plate special.
Options proposed by a citizen fiscal policy committee call for the county to bypass digging deeper into taxpayers' wallets.
A subcommitee of the Citizens Budget Oversight Committee recommended:
- Allot money for grant-matching funds. The county has missed out on federal, state and foundation grants in the past, because it didn't have the required match.
- Establish an economic development policy and a committee to study perks the county could use to recruit businesses with a "net return" in taxes and fees.
- Restrict one-time funds to one-time needs, not operational expenses.
- Retain the property tax mill levy but issue a credit with tax bills if revenues exceed the Taxpayer's Bill of Rights revenue cap.
The measure would stem TABOR's downward "ratchet effect" on the tax rate when assessed values rise, which has happened nearly every year since TABOR was adopted in 1992.
The committee believes stabilizing the rate would enable the county to collect more revenue but remain within the mandated cap.
"It's bogus," said Douglas Bruce, TABOR's author, adding the measure would violate the law.
The committee's ideas, to be presented to county commissioners this month, come as the recession continues to erode revenues.
Budget Director Nicola Sapp said Thursday the county's revenue through April fell $1.1 million short of budget forecasts, putting the county on track for a $3.4 million shortage this year.
However, operating and capital spending declined in the first four months.
"We don't see any additional cuts needed now but will be watching it closely," said Commissioner Sallie Clark, who didn't rule out cuts in 2010.
A big help came from an eye-popping seven-fold increase in use tax collections, a 1-percent tax charged on construction materials, during the second quarter - $893,000 compared to $131,000 in the first quarter.
On April 1, the county transferred collections from the city to the Regional Building Department. Commissioners suspected some builders shipped materials to work sites without paying the tax. Now, the tax is tied to building permits.
"We collected more in June ($657,500) than the city did in all of 2008, even though activity is down 34 percent on residential and 49 percent on commercial," Commission Chairman Jim Bensberg said.
Bensberg, who instigated the change, predicted the county will bring in $4 million in use tax this year without a 90-day wait to get it from the state.
"I'm proud as punch that we changed the way we collect it," said Bensberg.
Any extra would help fill the anticipated budget gap and unexpected expenses, such as the $110,000 to $150,000 needed for courthouse repairs after a June 26 storm pealed off the south tower's roof.
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