Ballot Proposal: City of Colorado Springs Financial Recovery from COVID-19

Share this page:

Mayor Suthers - Proposed TABOR ballot issue

By Mayor John Suthers
 

The COVID-19 pandemic and stay-at-home orders instituted in Colorado this past spring closed non-essential businesses, causing approximately a $30 million decline in City revenue resulting in cuts to city services. We are hopeful that the economy will recover relatively quickly, however, due to revenue and spending limitations contained in the Tax Payer’s Bill of Rights (TABOR), the City will not be able to recover at the same rate as the local economy.

To help the City recover financially much quicker and to continue providing the level of city services our community has come to expect, I am asking City Council to put a question on the November 3 ballot that would allow City finances to recover along with the local economy, and without raising taxes.  

Why do we need a vote for the City to recover financially?

Under the Taxpayer’s Bill of Rights (TABOR) contained in the Colorado Constitution and City Charter, revenue and spending limitations are based upon the prior year’s allowed revenues plus growth and inflation. As a result, the shortfall in 2020 City revenues not only reduces the City’s ability to provide services in 2020, but also causes the TABOR limits for future years to be lowered, further limiting the City’s funding and ability to restore cuts to services. This is known as the “ratchet down” effect, and could potentially result in $43,700,000 of revenue the City cannot use to provide services through 2025.

As an example, let’s say city revenue in 2019 was $300 million, but it declines by 10% to $270 million in 2020.  That means we can only grow from the lower amount by the percentage allowed by TABOR – typically about 3% per year.  That means it could take 3 to 4 years to get back to 2019 spending levels, despite the fact the economy recovers much faster and the city continues to grow.  City services that have been cut will not be restored as quickly.

Under TABOR, voters must approve revenue changes to avoid the “ratchet down” and recover quicker.

The proposal

The proposed ballot question asks voters to allow the City to retain and spend all revenue received in 2019 and 2020 in excess of TABOR limitations, and reset the revenue and spending limitations for future years to avoid the “ratchet down” effect.

Specifically, we are asking, without increasing taxes to:

  • Retain and spend up to $1.9 Million collected over the 2019 TABOR cap solely on Public Safety
  • Collect, retain and spend the full amount of City revenues received from all sources in 2020
  • Collect, retain and spend the amount allowed by TABOR in 2021 and future years, based on the total 2019 revenue and 2020 property tax revenue, adjusted in each year for inflation and city growth, thus continuing to limit future revenue growth

This would allow City services to be reinstated as the economy recovers and the City budget to reach 2019 levels in 2022, two years sooner if we act now.  If voters approve this proposal, our City finances can recover in half the time it would take otherwise.

For more detailed information on the proposal:

Subscribe to City News

Get a weekly update of news, events and upcoming public meetings from the City of Colorado Springs.