Over the last four years, Denver taxpayers have approved more than 13 fee or tax increases at a estimated cost of more than $280 million in additional taxes to the city's residents and visitors.
Denver's most restrained year for tax increases, 2003, saw taxpayers approve two property tax increases, including Initiative 100, which raised property taxes by $6.5 million annually to fund services for the developmentally disabled. In addition, Referred Question 1A raised property taxes annually by another $14 million for Denver Health Medical Center bonds.
The following year, 2004, brought four tax increases to Denver, including two statewide raises and two for special districts. Amendment 35, an increased tax on tobacco, has brought in an estimated $175 million statewide. With 12 percent of the state's population, and a much larger share of the state's work force commuting to the city each day, taxpayers here shelled out more than $21 million.
Also in 2004, Denver voters approved an extension of the Scientific and Cultural Facilities District sales and use tax. Denver's 2006 portion, according to SCFD, came to nearly $12 million. Denver voters also approved an extension of RTD's FasTracks light rail system, at an estimated annual cost of more than $37 million.
The added tax burden is reflected in part by a significant growth in Denver's general fund tax revenues. The city's tax receipts increased $23.57 million year-over-year in 2005 and another $26.84 million in 2006. This doesn't even include the myriad increases to special districts such as RTD and SCFD over the same time frame.
In 2005, Denver voters passed five measures to give government more money, including a new Justice Center, giving the city $17 million for the project. Specifically, voters gave up what would have been a $17,328,000 reduction in property taxes due to other bonds being paid off, opting instead to continue being taxed at the previous level in order to fund the new bonds.
Voters also decided to increase Denver Public Schools teacher pay for performance, adding $25 million per year to their property taxes.
Referendum C, the largest tax increase in Colorado history, passed with 52 percent support statewide. Denver voters, however, gave it 65 percent approval. At the time of the measure's passage, proponents estimated it would allow the state to keep $3.7 billion in tax money over five years. Absent the vote, the state would have had to return the funds to taxpayers, as required under the Taxpayers' Bill of Rights, which limits government spending.
In reality, the measure has cost taxpayers much more. With state revenues up, the Office of State Planning and Budgeting, is now projecting that the State will be able to keep an additional $2 billion, for a total of $5.35 billion. Denver's portion, based on current projections under the department's most recent budget report, will amount to an estimated $642 million, or nearly $129 million per year for five years.
Also in 2005, Denver voters responded positively when asked by City Council to approve a 10-year exemption from TABOR on city sales and use taxes, and other non-tax revenue such as to fines. While property taxes were excluded, representatives from the city's budget office told the council's finance committee that the total cost to taxpayers would amount to $5 million annually. The effects of this 10-year exemption will be felt far into the future, since it included a provision to reset the TABOR base (the point from which statutory tax and spending limit increases are calculated) at the highest level attained during the exemption period. This same year, voters also raised taxes on visitors to the city, increasing the "Lodger's Tax" on hotel rooms.
The 2006 election presented two irresistible tax increases, although the first was not billed as such. The 20-year Public Service Franchise Fee renewal contained a new provision that charged the fee on 100 percent of residents' utility bills, as opposed to the old agreement, which exempted the first $12.50 of every bill from the fee. The resulting increase is estimated to translate into $2 million in additional revenue for the city, according to a pro/con fact sheet distributed by Councilwoman Jeanne Faatz.
Voters in 2006 also decided to increase their sales and use taxes by $12 million annually to add public funding for preschool education.
In total, over the last four elections, Denver taxpayers have approved at least $281.6 million in increased taxes and fees[~]not including increased taxes from the city's lodging tax.
While such an increase is substantial, city residents and visitors should get ready for more. A recent report from the Finance Committee of the Mayor's Infrastructure Priorities Task Force recommends that the city raise property taxes by another $27 million per year to fund infrastructure projects. The report also recommends that the city plan future debt issuances to "take maximum advantage of retiring debt that is within the 'no new tax rate' threshold", meaning there is no relief in sight for Denver's taxpayers as current bonds are paid off, in the near or distant future.
A note about the numbers: Unless otherwise indicated, the tax amounts listed here are from ballot language presented to voters when the taxes were approved, or from official city estimates.
