So we’re going to consider a number: $44.55 million in new sales taxes. Seems like there’s some confusion about what, exactly, the voters have been asked to fund with Archuleta County’s proposed 1A tax increase… with that proposed 1.0 percent increase.
We have other tax increase proposals on the ballot this year. Archuleta School District would like an additional $1.7 million per year for seven years. That’s about $12 million in total taxes, to be used mainly for staff salaries. The Colorado Department of Transportation is offering us two chances to spend more money on roads: Propositions 109 and 110. Proposition 109 would not increase taxes; it would merely redirect tax revenues away from other essential state services to pay for a huge new debt. Proposition 110 would increase our sales tax by 0.6 percent all across the state, with a large portion of that money going — once again — to pay off a huge debt.
Archuleta County wants to create its own sizable debt — $25.8 million — for an oversized jail and Sheriff’s Office. But the 1A ballot measure is less clear about how much, exactly, the County would collect from us. It specifically mentions $2.97 million in new taxes the first year, and it specifically mentions 15 years. That seems to total $44.55 million, on anyone’s pocket calculator.
But governments aren’t always clear about how much, and what for.
I spent most of the morning researching a rather ambitious project currently being promoted by the volunteer board of directors at the Community Development Corporation (CDC). In response to grants offered by the Town of Pagosa Springs and the Archuleta County Board of County Commissioners, the CDC hired Richard Lindblad and Eric Hittle to create a plan for better broadband internet service in our community.
The Town and County will be having a joint meeting today at noon, to hear more about how that’s panning out, and what it’s going to cost, and who’s going to be paying for it. I’m looking forward to learning more about whether small local governments should get themselves deeply involved in providing broadband services.
Following a previous CDC broadband presentation, back in January 2017, I did a little bit of research and came upon this quote from the Southwest Colorado Council of Governments (SWCCOG) Strategic Broadband Plan:
Internet-connected televisions, radios, set-top boxes, Blu-ray players, Netflix, cameras and picture frames now receive or deliver movies, TV and photos through the Internet… In 2014, video downloads and uploads comprised 50 percent of all Internet traffic. In the coming years, the sum of all forms of Internet Protocol (IP) video (Internet video, video on demand, video files exchanged through file sharing, video-streamed gaming, and videoconferencing) will reach 86 percent of the total Internet traffic.
This is certainly a fascinating claim: that soon, the delivery and consumption of videos will constitute nearly 90 percent of all Internet use.
A few years ago, the state of Colorado and the thirteen governmental entities that belong to the SWCCOG spent over $4 million building the Southwest Colorado Access Network (SCAN) to increase the available bandwidth in small towns like Pagosa Springs.
SCAN wasn’t the first big Internet project to visit Southwest Colorado. Back in 2009, a “quasi-governmental” agency called EAGLE-Net was awarded $100 million in federal funding by the Obama administration, with a promise to run fiber optic cable to 168 school districts in Colorado. State and local governments contributed another $35 million for the project.
But EAGLE-Net came under scrutiny in 2012 for spending heavily and failing to fulfill its mission. Auditors found that the agency had spent about $96 million of its federal grant and had completed just over half of its work. It was also discovered that the agency was laying fiber in places where fiber already existed.
EAGLE-Net’s construction program was suspended by the federal government in 2012, and resumed in 2013. By the end of February 2014, it had reached 98 school districts — with only 63 subscribing to its services.
It’s so easy to waste taxpayer money.
I came to the conclusion that — if the new SWCCOG report was correct, and we will soon be using 86 percent of our bandwidth to send video files — then it might be accurate to say that, of the $4 million in taxpayer revenues used to build the SCAN network in southwest Colorado, about $3.6 million of that amount was ultimately spent so that people can sit and watch TV on their computers.
Maybe that’s a good use of our tax money, I don’t know. It’s complicated.
The question posed to us by Ballot Measure 1A is also complicated. Some full-page ads running in the weekly Pagosa Springs SUN claim that 1A would ultimately burden the community with around $44 million in new taxes. Taken literally, that’s what the ballot seems to promise.
But another set of ads — promoting the tax increase — state that the dollar amounts shown in the ballot are only estimates, and that we don’t really know how much the County will collect over 15 years. Yes, it might be $44 million, but it might be less.
Or it might be more.
When you establish a 1.0 percent sales tax increase, your tax collection depends upon how much the community spends, locally, on food and other consumables. This year, Pagosa shoppers will contribute about $2.57 million in sales taxes to the County government’s General Fund, according to the County’s 2019 draft budget. That General Fund amount is half of the 2.0 percent County sales tax.
So, for 2018, an additional 1.0 percent sales tax also would have generated $2.57 million.
The County budget for 2019 projects $2.63 million for next year — a 2.3 percent increase. If sales taxes never increased, after 2019, then a 15-year collection of an additional 1.0 percent tax would amount to $39.5 million. But what if sales tax collection actually increased, year after year, the way they’ve been doing for the two decades?
15 years ago, in 2003, the County General Fund was collecting about $1.3 million from a 1.0 percent sales tax. In 2019, the amount collected will be double that amount, meaning that the sales tax collections have increased — on average — by around 6 percent per year since 2003.
If our sales tax were to double — again — between now and 2033 when the 1A tax increase would expire, then the County government would collect an additional:
2019: $2.6 million
2020: $2.8 million
2021: $2.9 million
2022: $3.1 million
2023: $3.3 million
2024: $3.5 million
2025: $3.7 million
2026: $3.9 million
2027: $4.1 million
2028: $4.3 million
2029: $4.6 million
2030: $4.9 million
2031: $5.2 million
2032: $5.5 million
2033: $5.8 million
Grand total, to be collected under Ballot Measure 1A, for “Justice System Capital Improvements” (not for roads or anything else):
$57 million in additional sales tax.
The tax increase proponents have a point. The 1A debt is $25.8 million. But we really don’t know how much Archuleta County would be collecting from an additional 1A sales tax increase.