We found that in Region 9, Montezuma County is the least expensive ($91,519 annually), and Archuleta County is the most expensive place to live ($105,919 annually) for a family of four…
— from Region 9 Economic Development District, 2025.
Yesterday, in Part Three, we considered an attempt by the Springs Resort to acquire $79 million in future property tax subsidies for a resort expansion, through the “Urban Renewal Authority” (URA) created in 2019 by the Town of Pagosa Springs, expressly for that very purpose. The tax subsidies to the Springs Resort would have come through a process known as “Tax Increment Financing” or “TIF”.
Following a citizen uprising at the polls, the Springs Resort decided not to request the $79 million in tax subsidies.
“TIF” is a clever financing concept originally developed in California. Simply stated, a municipal government agrees to subsidize a development with the “increase” in property taxes created by the development, over a certain time period… typically 25 years.
Colorado has now established a similar mechanism for county governments. But the TIF period is 30 years, rather than 25 years.
Here’s a graph shared by January 7 presentation by Emily Lashbrooke, Executive Director of the Pagosa Springs Community Development Corporation (PSCDC) at a January 7 Board of County Commissioners work session.
In this simple example, the property in question was paying $1,000 in annual property taxes in 2029 — to schools, fire district, library, medical center, water districts, county, town — but by 2059, the property value had greatly increased due to some type of development project. Using TIF a government could divert the “increase” in property taxes (shown by the green color) into the developer’s pockets, over a 30-year period. The schools, fire district, and all the other tax-funded government would give up the increased tax benefits — 30 years of benefits — in the interests of “Economic Development”.
In the case of the Springs Resort request in 2019, the Town Council would have been in control of the TIF, and could have made the decision to divert everyone’s property tax increase into the developer’s pockets.
But the Town would itself pay almost none of the taxes. Less than $700,000 of the total subsidy would the come from the Town. The big loser would have been the Archuleta School District.
We note here that an Urban Renewal Authority doesn’t dissolve after funding a single economic development project. A municipal URA can theoretically create dozens of TIF-funded projects, and can theoretically drain future taxes, from the County and every special district, for practically any development that happens to come along… far, far into the future.
Apparently, the Town Council in 2019 was perfectly comfortable with this arrangement. Perhaps because the Town’s tax revenues come almost entirely from sales tax, not from property tax? And sales tax is not affected by a TIF funding arrangement.
The voters stepped up and said, “No thank you” to the proposed tax giveaway.
As mentioned earlier in this editorial series, county governments in Colorado have not been allowed to create Urban Renewal Authorities. That makes perfect sense, because allowing counties to use TIF financing would likely encourage “suburban sprawl” — a once-favored development pattern that has led America into all kinds of problems, including a massive backlog of deferred maintenance for county infrastructure.
But it seemingly didn’t make perfect sense to the Colorado General Assembly, because they passed HB24-1172 last year, to allow for “County Revitalization Authorities”. The bill was signed into law by Governor Jared Polis last June. A “County Revitalization Authority” appears to be very similar to an “Urban Renewal Authority” with a few differences.
I think I was in third grade when I learned that the addition of the prefix “re-” to a noun or verb implied “something done again” or “something returned to a previous state”.
Renewal, for example. Rejuvenate. Revert. Rearrange.
A government or developer engaging in “Urban Renewal” would be “returning” an older neighborhood to a much better state. So we might assume that the aim of a “County Revitalization Authority” would be to “revitalize” an already-developed area that had fallen upon hard times.
We know, however, that governments are prone to use “Economic Development” tools in inventive ways — often to benefit one particular developer, business, or corporation.
The General Assembly wasn’t entirely crazy when they passed HB24-1172 last year. They may have been noticing how the “Urban Renewal Authority” was being used in situations that didn’t involve any “renewal” at all, and that tax revenues were being diverted, by cities and towns, away from special districts without the permission of those special districts. In fact, a special district must actively choose to donate its tax revenue to the project. And school districts cannot donate their tax revenues.
I was happy to have access to the chart above, because the actual law — HB24-1172 — is 65 pages of ‘legalize’ that I found to be practically unreadable. I would be honestly surprised if our Colorado legislators understood the nuances of what they were approving… or if the Governor did when he signed the bill into law.
It’s a well-recognized aspect of human nature that we’re creatures of habit, and we easily become comfortable with the status quo — and uncomfortable when someone else wants to introduce ‘change’ into the environment or situation. (When we are introducing the ‘change’ ourselves, that’s perfectly okay.)
Perhaps less recognized is our desire for variety and novelty.
We want our community to remain the same as it was. But we also want our community to steadily improve and change.
We want our elected and appointed leaders to be “fair” and to avoid handing out special favors to particular developers.
We want our “Economic Development” efforts to identify particular developers and hand out special favors to them, to improve life for everyone.
When we try to improve the economy — as various agencies have been doing for the past 50 years — it can actually make life worse for some families and individuals.
According to one of those agencies, Region 9 Economic Development District, Archuleta County now has the highest cost of living in Southwest Colorado. A “livable wage” for a family of four: $105,919 a year.
Maybe we don’t really understand what we’re doing?
Read Part Five, tomorrow…