Back in 1992, Colorado voters approved Colorado Initiative 1 — a constitutional amendment — by a healthy margin. About 54% of the state’s electors voted in favor of adding the Taxpayers Bill of Rights, more commonly known as TABOR, to the Colorado Constitution. About 46% voted ‘No.’
TABOR attempted to place a number of constraints on the growth of state and local governments, mainly by limiting the amount that a government budget could increase year over year, and by requiring voter approval for “…any multiple-fiscal year financial obligation whatsoever.”
My friend Mark Weiler currently serves with me on two local ‘government’ boards:
…on the Pagosa Peak Open School board of directors (which is technically a “non-profit” board rather than a government board, but it’s a complicated situation…)
…and on the Town of Pagosa Springs Planning Commission.
Mr. Weiler and I often agree on government policies. Just as often, however, we disagree. One of the areas of disagreement concerns government debt. Mr. Weiler has often argued that leveraging long-term debt to benefit the citizens of Archuleta County is, in many instances, a wise course of action. (To put that into perspective, he and I both objected publicly, during two recent election campaigns, to the creation of long-term debt to fund the construction of a $20 million County Jail.)
Daily Post editorials have been fairly consistent, meanwhile, in questioning attempts by our local governments to put the taxpayers ever more deeply into long-term debt without voter approval for that debt. According to the Colorado Constitution, local governments are required to obtain voter approval for “any multiple-fiscal year direct or indirect district debt or other financial obligation whatsoever without adequate present cash reserves pledged irrevocably and held for payments in all future fiscal years.”
Any multiple-fiscal year financial obligation. Whatsoever.
The Town of Pagosa Springs is already $3.9 million in debt for its current Certificates of Participation (COPs) — and plans to add another $3 million for the Town maintenance facility.
The Archuleta Board of County Commissioners plans to put us $20 million in debt using COPs, to build a fancy new jail. (These rough dollar figures include the ‘interest payments’ on the proposed and existing COPs.) That’s on top of the existing COP debts created prior to 2010.
Clearly, socialism is not cheap, when governments feel justified about putting citizens deeply in debt without their approval. Of course, all of this local debt is not even a drop in the bucket compared to the massive debt our US Congressional leaders and US Presidents have created on our behalf. I think it’s currently in the neighborhood of $22 trillion. But in a way, we asked for this. We actually elected our current County Commissioners. We actually elected our current Congressional leaders and our President.
(There are two elections scheduled for this year, by the way. The Town will hold its election of Council members in April. State and federal elections will be held in November. But you already knew that.)
Last spring, a friend sent me an email suggesting that I may have betrayed a ‘pro-government’ stance in one of my editorials — in contrast to what he saw as my normal ‘anti-government’ stance. In that editorial, I had summarized some of the many ways that our governments have been supporting our citizens with expenditures that some people could easily define as “Socialism.”
A tax-supported hospital, for example. Tax-supported schools. Several tax-supported water districts. A tax-supported library. A tax-supported County Fair. A tax-supported tourism industry. Tax-supported childcare. Tax-supported broadband expansion. Tax-supported law enforcement. Tax-supported social services. Tax-supported recreation and parks. Tax incentives for home ownership, through federal and state tax deductions for mortgage payments…
Occasional street maintenance…
The list goes on.
If we compare the range of services citizens once expected their governments to provide… as envisioned in, say, 1776… to the range of services provided in 2020… well, yes, we obviously have aspects of a socialistic system in place.
Perhaps “affordable housing” is another appropriate use for taxpayer funding? Perhaps it’s even a better use than some of the other ways we’re spending our tax revenues?
Those were questions I wanted to pose in my editorial last March.
But Americans didn’t always rely on massive debt to keep their society functioning, even though our federal, state and local governments have been holding some level of public debt continuously since before the US even officially existed. Wars are not cheap, and the Revolutionary War was no exception.
But somehow we’d gotten a handle on public debt by the year 1900, when government debts totaled only about 20% of the national GDP. Our public debt level today is about 120% of the GDP.
That’s just the publicly-held debt. Privately-held debt in the US amounts to about 150% of our GDP.
Which, according to my pocket calculator, would make the total US debt — public and private combined — equal to about 270% of our total economic output.
This past November 5, the Pagosa Springs Town Council approved a new ‘Urban Renewal Authority’ at the request of two development companies: Pagosa-based BWD Construction and Texas-based Dronet Development Group. The request from these developers, as presented last summer, would dedicate $79.6 million in future tax collections to reimburse the developers for a Springs Resort expansion project on 27 acres of vacant land along the San Juan River, a couple of blocks from our historic downtown core. Under the proposed plan, the tax reimbursements would be provided through a Tax Increment Financing (TIF) arrangement, lasting up to 25 years.
Socialism?
Or is this ‘enlightened Capitalism’?
The law that allows this form of long-term debt… and really, this would be essentially a financial obligation placed on the shoulders of future generations, a commitment of tax reimbursements to some private developers for up to 25 years… and the Colorado law that allows this type of TIF debt dates from the late 1950s.
In 1992, however, the Colorado voters told our state and local governments that we wanted the right to approve “any multiple-fiscal year direct or indirect district debt or other financial obligation whatsoever…”
In my book, this means that the voters have the ethical right to approve TIF-funded projects.
That’s not the way the 60-year-old Urban Renewal Law was written, of course. The original Colorado law gives the voters no legal right to weigh in on URA tax reimbursements.
The question in my mind this morning is: is this yet another “Growth Ponzi Scheme”?
Bill Hudson began sharing his opinions in the Pagosa Daily Post in 2004 and can’t seem to break the habit. He claims that, in Pagosa Springs, opinions are like pickup trucks: everybody has one.