EDITORIAL: Town Council Weighs In on County’s Proposed Tax Increase, Part Two

Read Part One

One of the concerns expressed by the Pagosa Springs Town Council at their August 1 meeting — as they analyzed a tax increase being proposed by the Archuleta County Board of County Commissioners (BOCC) to fund a new jail and Sheriff’s administration building — was the proper delivery of the Council’s message to the BOCC.

Obviously, there were two news reporters in the audience — SUN reporter Marshall Dunham and myself — and the Council’s Tuesday evening decision would likely be reported in the media within a day or two. So the County commissioners might feasibly hear about the Town Council’s vote by “reading about it in the paper.”

Not the best way to send a critical message to fellow community leaders, perhaps.

The Council discussed the idea of passing an official ‘resolution’ instead, but the problem was timing. The next Town Council meeting would take place on August 17… and the BOCC had already expressed their intent to vote on ballot language on August 15.

Presumably, it would be preferable for the Town Council to share its opinion about the proposed tax increase prior to August 15?

As noted in Part One, the Council had unanimously agreed that a sales tax increase was not the preferred type of tax increase — considering the Town governments dependence on sales tax revenue, and considering that the BOCC has expressed no intention of sharing a potential sales tax increase with the Town.

Following the unanimous vote to endorse a property tax increase as the Council’s sole preference — assuming a tax increase will indeed be sought by the BOCC — Town Manager Greg Schulte was directed to promptly send a letter to the BOCC informing them of the Council’s vote. Alhough Council member Mat DeGraaf’s actual motion may have been open to misinterpretation (as noted in Part One) the letter signed by Mayor Don Volger — sent to the BOCC on Wednesday, August 2 — was an excellent summary of the Council’s Tuesday discussion:

Dear Chairman Wadley:

On behalf of the Town Council, I would like to convey our appreciation for sharing the different financing scenarios at our last joint Town / County meeting on July 25th. It was good information to help us understand the magnitude of the problem as well as the possible remedies. At our Town Council meeting last night, the Council again reviewed the financing scenarios information and discussed the different options available.

After much discussion, it became clear the primary concern of the Council was the prospect of placing a sales tax increase on the ballot to finance the justice center improvements. As has been said many times before, sales tax is the primary source of revenue for municipalities. If the County increases the sales tax for this singular purpose, it significantly inhibits the Town’s future financial options.

I will pause here, midway through the letter, to touch on a couple of points. Archuleta County imposes a 4 percent sales tax everywhere in the county. But most of the sales — maybe 85 percent of the sales — take place within the Town limits.

Currently, the Town and County have a legal agreement to share the County’s 4 percent tax on a 50/50 basis. But as the Mayor noted in his August 2 letter, a “County-Only” tax increase, imposed for a 20-year period, would likely impact the Town’s ability to pass a future sales tax increase if needed for its own purposes.

The Mayor’s letter continues:

By a vote of 6-0, with Council member Clint Alley not present, the Town Council voted to convey to the County Commissioners that we do not support the use of a sales tax increase to fund the justice center facilities, and that a mill levy is more appropriate for that endeavor. Please don’t interpret this letter as opposition to the project itself, but we feel that taking this position is in the best interests of the Town of Pagosa Springs.

Please understand we do appreciate the difficult circumstances the County is facing in regards to the financing of the justice center facility. It’s a difficult choice. We hope the knowledge of our preference at this juncture helps guide you in your future decisions.

BOCC Chair Steve Wadley has, on numerous occasions, stated that the BOCC must chose the type of tax increase most likely to be approved by the community’s voters — 85 percent of whom live outside the Town limits. Commissioners Steve Wadley and Ronnie Maez have also hinted, on occasion, that they are leaning towards a sales tax proposal as the type of increase most likely to win voter support.

But Mr. Wadley has also stated, on numerous occasions, that he considers the support of the Town Council — as key community leaders — essential to getting the proposed tax increase passed in November.

It might now appear that the BOCC will now have make a choice, whether to embrace the the Town Council’s preference for a property tax measure — or to ignore the Mayor’s letter and proceed with a sales tax initiative.

There might, however, be additional reasons why the BOCC would want to choose a property tax increase as the preferred option for the ballot, rather of a sales tax increase.

Here’s a photo I snapped last week, outside the entrance to the uptown Walmart discount store.

Several of these signs appear on the posts outside the store entrance.  I believe this simple plastic sign has something important to say about the future of the American tax system.

Read Part Three…

Bill Hudson

Bill Hudson founded the Pagosa Daily Post in 2004 in hopes of making a decent living writing about local politics. The hope remains.