Mayor has big plans to tax

Officials say it would fund lofty goals at little cost to taxpayers.

If taxpayers’ ears were ringing during Denver Mayor Michael Hancock’s recent inaugural address, it was for good reason.

He laid out expansive secondterm plans that could rely on tax money of various types to help foot the cost for big initiatives and projects. That starts with a ballot measure in November to extend two tourist taxes to help pay for the $856 million National Western Center project and a Colorado Convention Center expansion. Another he’s backing would create a small sales tax to help lowerincome residents pay for college.

The mayor also previewed still-unsettled plans for the next year or two that could raise $15 million a year for affordable housing construction, tackle transportation challenges and kick off renovations to the Denver Performing Arts Complex. All three are still in planning or just getting underway.

Hancock and his advisers argue each would be a vital investment in the city’s economic future, keeping Denver competitive. And they say each proposal is being crafted carefully to avoid saddling taxpayers with an extra burden beyond what they’ve paid recently.

But critics and others question some of the goals, especially Hancock’s endorsement of the college tax, which was proposed by education and community leaders. Some suggest the city risks overstepping its role.

Not that anybody expects Denver’s generally taxfriendly voters to put up much fuss.

“I don’t know if there’s a fatigue point in Denver,” said Mike Krause of the libertarian-oriented Independence Institute, which has qualms about some of the ideas. “I’ve lived here a long time, and I haven’t seen it.”

The budding plans beyond this year could include going back to voters for more tax or borrowing approval. But more likely, city officials say, is that they first will seek out private partnerships and other options for the arts complex project. For affordable housing funding, they could propose new impact fees or tap into property tax money in a way that wouldn’t require voter approval.

Still, Hancock has said all options are on the table, especially with the shrinking availability of federal funding in recent years.

Tax-happy Denver

During his July 20 inaugural address, the mayor framed the big initiatives as pressing challenges that the city must address to continue thriving.

“This is a critical moment in our history,” he said. “We must have the courage and foresight to think about the future (and) to plan for the city our children will inherit.”

Like Mayor John Hickenlooper before him, Hancock has had a good run at the ballot box so far.

During his first term, voters by big margins approved a permanent “de-Brucing” of sales and revenue limits under the Taxpayer’s Bill of Rights, allowing the city to pocket about $42 million extra per year to restore cut city services, boost maintenance and hire more cops. Voters signed off on a new retail marijuana tax after the state legalized recreational marijuana. Last year, they extended and increased the Denver Preschool Program sales tax.

Denver voters also approved big Denver Public Schools funding measures, but the mayor doesn’t oversee DPS.

“Denver voters are somewhat unusual in the state in this regard, in that not only have they been supportive of these local tax measures, but they’ve continued to reward mayors who ask for them with higher and higher approval ratings,” said Seth Masket, chairman of the University of Denver’s Department of Political Science.

The initial vote in 2006 to create the preschool tuition-credit program was a rare close call, passing by a mere percentage point. (Last year’s extension won by 10 points.)

More recently, though, when statewide voters two years ago resoundingly defeated Amendment 66, a $950 million tax increase for schools, Denver’s voters bucked the trend. Yes beat no by nearly 6 percentage points in the Mile High City.

Little cost for voters

Deputy Mayor Cary Kennedy, the city’s chief financial officer, laid out distinctions in each current or potential Hancock proposal that she said would result in little effect on most voters’ wallets.

The National Western Center ballot measure would permanently extend existing 1.75 percent lodging and car-rental taxes, typically paid by visitors. The Denver college affordability program — modeled in part on the preschool sales tax — would, she argued, restore most of a 0.1 percent stadium tax that expired at the end of 2011 after the Sports Authority Field debt was paid off.

Kennedy said discussions about creating a sustainable affordable housing funding stream more recently have focused on options that wouldn’t require voter approval.

The City Council could create a development impact fee, she said, or tap into extra property tax rate capacity that’s available in 2017 after the city reduces the rate to partly offset surges in property values.

“The overall burden and tax rates won’t change from what people are accustomed to in Denver,” Kennedy said.

This fall’s city-sponsored ballot measures so far haven’t drawn organized opposition.

Voters also will decide two other items Nov. 3: a TABOR request to let the city keep the first-year proceeds from its 3.5 percent retail marijuana sales tax, and a deal with Adams County to allow commercial development on airport property, with the two counties sharing future tax proceeds.

City Councilwoman Robin Kniech, who is on a committee that could advance the college sales tax measure in a vote Wednesday, is undecided. She has concerns about the city wading into the traditional state domain of higher education and the regressive nature of the sales tax.

But she said city leaders generally have done a good job of weighing priorities before asking voters to approve tax or borrowing measures, and they’ve staggered borrowing to even out the city’s overall debt load. The city has top-level AAA credit ratings.

She’s also mindful, she said, that the new ballot measures would affect taxpayers differently.

“When you start to sort out the fruit,” Kniech said, “only one or two of these actually involve any costs to most of our voters.”