The Pagosa Springs Town Council engaged in a lively conversation yesterday, around a single question.
Should the Council throw their support behind a $6.5 million sales tax increase ballot measure, originally proposed by Archuleta County Manager Derek Woodman a couple of months ago?
By a 4-2 vote, the Council agreed to support the ballot measure.
$6.5 million is merely an estimate of the tax increase collections, for the first year. Could be more, could be less. But if the $6.5 million estimate is correct… and if inflation in America remains at around 8%… well, that could add up to a chunk of government change, over the next 10 years.
According to my pocket calculator — and based on the current inflation rate — this proposed sales tax increase would, over the next 10 years, extract about $94 million from the general public and funnel it into County and Town bank accounts. At a more “normal” inflation rate of 3%, the proposed tax increase would total, over the next decade, $74 million.
The timing of the Council discussion was important, because the Archuleta Board of County Commissioners will reportedly be making a decision about the proposed ballot measure at their regular meeting on Tuesday, September 6 at 1:30pm.
As currently proposed, the tax would be perpetual. The County could have proposed a tax that ‘sunset’ after a few years, to give the voters more control. But maybe the County doesn’t trust us?
It’s a relatively straightforward process, to propose a tax increase, either temporary or perpetual. But when a County sales tax is perpetual, it’s nearly impossible for the voters to remove it.
Prior to yesterday’s Council vote, Mayor Shari Pierce — one of the Council members who ended up voting to move forward with the tax increase proposal — invited the public to comment on the question.
But first, Town Manager Andrea Phillips gave the Council an overview of all the ways the Town government could spend their share of the money. Which, by my calculations, might be in the neighborhood of $40 – $45 million over the next 10 years?
Then local activist and former Town Council member Mark Weiler stood to address the Council.
“Thank you, Mayor, and Council members, for the opportunity to share some thoughts with you.
“Number one. What I’d like you to consider doing is using the Internet, with this search phrase: ‘Impact of increased sales tax on low and medium income families’. The most respected, in the business world, is probably Bloomberg, and I think you will find, there, writing about how devastating increased sales taxes are, to low and moderate income families.
“Number two. What I’d like you to consider is, how much of an increase in sales tax collections the Town has enjoyed over the twenty years that I’ve been here. To know that your current budget is $10 million, generated by sales tax revenue, is really quite astounding, compared to what it was when I came here.
“Number three. The biggest change in sales tax receipts occurred as a result of the ‘Wayfair’ Supreme Court decision, which required companies to collect sales tax based on where the purchase was made. You’ve had a massive increase in revenue, here at the Town…”
I will interrupt Mr. Weiler here to clarify this statement. In 2018, the U.S. Supreme Court confirmed the right of the South Dakota state government to collect sales tax on Internet sales, and subsequently, many other states — including Colorado — began requiring sales tax to be paid on Internet purchases, and remitted to state and local governments.
Paid by the consumer, of course.
In 2018, the Town of Pagosa Springs had received sales tax from local purchases — amounting to about $5.1 million.
In 2022, the Town expects to pull in $8.8 million from purchases made in Pagosa Springs, and also now, from Internet sales made by people having their purchases shipped to a location in Pagosa.
Mr. Weiler continued.
“The next thing I would like you to consider. When you say that we are only talking about a 1.5% increase in sales tax, my lawyer colleagues use a polite term: ‘disingenuous’. A polite term, for telling a lie. The actual increase you are contemplating is 37.5%.
“37.5% in increased cost, to the low and moderate income citizens of Pagosa Springs. I find this unconscionable. I think you should, too.
“The last thing I’d like to point out, is that one of our County commissioners was quoted by the [Pagosa Springs SUN newspaper] as saying: ‘The voters are responsible for putting us in a very difficult financial position, because they turned down our request — twice — for sales tax increases.’
“That’s not an accurate statement. The commissioners put the citizens in a terrible financial position by not paying attention to the views of the citizens.”
I will again interrupt Mr. Weiler here to clarify that last comment. In 2017 and then again, in 2018, the Archuleta Board of County Commissioners proposed a 1% sales tax increase to fund a new County jail and “justice center”. Both times, the voters rejected to plan and the sales tax increase. The BOCC then went ahead and built the jail and justice center anyway, using ‘Certificates of Participation’… and putting the County taxpayers in “a terrible financial position” (to use Mr. Weiler’s words.)
Mr. Weiler continued with his comments.
“I think the Town of Pagosa Springs has always been the leader in Archuleta County. It’s not been the County commissioners. And I understand the County commissioners’ desire for more revenue, to cover up their past mistakes. But I urge you not to be complicit in that.”
Mr. Weiler was not the only person to urge the Council to refrain from throwing their support behind a 2022 sales tax increase ballot question. The most eloquent analysis of the many reasons why this proposal was ill-timed came from Council member Brooks Lindner.
I believe Mr. Lindner is the only Council member who has been instrumental is guiding a successful tax increase here in Pagosa Springs, which he did during his tenure on the Archuleta School Board. That two-year process involved numerous community gatherings and a well-organized marketing campaign.
It also involved, ultimately — at the end of that process — a significant reduction in the amount of increased taxes the School District requested from the community.
Even here, in ‘fiscally conservative’ Archuleta County, the ballot measure passed by a healthy margin.
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.