Business reaction mixed on mill levy override
More money for her children’s schools would mean less money to do business in Mesa County for Rocky Mountain Sanitation co-owner Lisa Mullen.
As a business owner, the mother of three would pay an additional $203 a year in property taxes for every $100,000 of her business’s worth if District 51’s mill levy override passes in the Nov. 1 election. Colorado’s constitution places a greater property tax burden on businesses than on homeowners, who would pay an additional $55.72 for every $100,000 of a home’s worth.
Mullen, whose business is located at 721 23 Road, does not support the override and worries it will force her to raise rates for the first time in two or three years. She would prefer the school district “look to other avenues, whether it’s cutting positions or something other than going to property owners asking for money.”
“As a mom, I want our kids to have the best possible education, but as a business owner, I want to make sure every dollar that’s spent is spent wisely,” she said.
Bill Ogle, owner of Sorter Construction, has no children in District 51. But he wants the override to pass so he and other businesses can choose from an educated pool of potential employees.
“It would be nice if you go to a restaurant if the person taking your bill can figure out the change,” Ogle said.
He added the difference between a potential employee who has been pushed through a school with student-packed classrooms and one who received individual attention “is like night and day.” That’s why he supports one goal of the override to bring back 80 teachers.
“We can’t continue to plummet. My kids are raised and gone but it’s a necessity for society,” he said.
Ogle said the cost of the override to his business “is an issue for sure.” But he doesn’t expect it to inhibit anyone’s ability to do business here. Ron Maupin, owner of Haggle of Vendors Emporium at 510 Main St., isn’t so sure.
Maupin said he, like many business owners, has had to cut back on certain purchases and services to get by during the recession, and he expects the school district to do the same. He worries some businesses will not be able to cut back any more and may go out of business trying to pay for the override.
“I am concerned about kids’ education, but if there are no stores and no workers, then what?” Maupin asked.
Maupin said he would rather see the district cut back on administration than personally shell out an additional $1,015 annually on his $500,000 storefront. He already pays nearly $6,000 a year in total property tax on his business, he said.
Lynne Sorlye, general manager of The Clarion Inn at 755 Horizon Drive, said it’s hard to absorb new taxes in a down economy. Even though the hotel’s owner lives in Missouri, the hotel pays property taxes out of its operating funds. But she feels good about the override’s timing, which is in step with new, lower valuations that reflect changes in the local economy and property sale prices. Valuations for property taxes paid in 2010 and 2011 reflected 2009 prices, but taxes paid next spring will reflect current values.
“If nothing happens, we would see a reduction. If this passes, taxes are not going to go down as much, but if valuations were the same and based on inflated 2009 valuations, it would be a bigger increase,” Sorlye said.
Maupin acknowledged he may pay less even with the override once his new property valuation is done, but he won’t know that for sure until 2012, after the election.
Pay it forward
Business owners may not agree on the override, but they tend to agree on who will pay for it: customers.
Chris Brown, owner of Brown Cycles at 549 Main St. and a father of four young children, said businesses aren’t likely to cut back for the override, because they’ve already made adjustments to weather the troubled economy.
“Any business that’s going to survive is just going to pass it on to their customers. If the community wants it, then the community’s going to end up paying for it,” he said.
Bray Real Estate President Robert Bray hasn’t taken a position on the override but does have ideas about what it will mean for the real estate market. While he doesn’t expect the override to scare away home buyers, it may cause a dilemma for some landlords.
“If the market’s in a situation where (the landlord) will not or cannot pay more for a rental, the owner may not have any choice but to pass that down,” Bray said.
Alternatively, a renter may not be willing to pay more while vacancy rates remain above 5 percent.
“The owner may have to absorb it. That’s the reality of a lean market,” Bray said.
On the fence
Voters will begin checking “yes” or “no” beneath the override question when ballots start arriving in local mail boxes this week. Some business owners, including Don Barnes, owner of Barnes Electric at 2811 Riverside Parkway, have yet to decide which way to vote on Referred Measure 3B.
On one hand, he expects the override will thin profits and may force him to raise rates. On the other hand, Barnes said it’s normal for businesses to raise rates, and he can understand why the district would want to do the same thing after shedding $28 million from its budget between 2009–10 and 2011–12.
“I can’t say I would support it but I can’t say I wouldn’t support some mill levy hike to support (schools). I have not made my mind up,” Barnes said.
Gregg Palmer, owner of Brown’s Shoe Fit Co. at 425 Main St., plans to vote for the override but doesn’t feel strong enough about his support to campaign for the override. He wants the district to keep cutting even if it gets more revenue.
“It has to be a compromise,” Palmer said. “The school district has truly been through a number of hard funding reductions, but we can’t continue to throw money at the problem, either.”
Palmer supports the override because local schools “are where my labor pool and my customers are going to come from.” He wants both to be educated and well-paid. He also likes that the money would stay local, unlike revenue that would be raised from statewide measure Proposition 103, which would increase income and sales taxes. That revenue would be given to Colorado schools and colleges in yet-to-be-determined portions.
Business reaction to the override is mixed in the Grand Valley, according to Diane Schwenke, president and chief executive officer of the Grand Junction Area Chamber of Commerce. She said the chamber endorsed the override after weighing the concerns of higher taxes and the role of education in economic development.
Schwenke said she is most excited about the override’s ability to bring back four school days that were cut during the past two years. She said schools in countries with high-performing students tend to have more hours in their school years.
She also believes businesses will benefit from the override when it comes to having a better-educated local workforce. She also hopes a reputation as an area with a good school system will attract more employers to raise their children and hire employees in the Grand Valley.
“Usually the single most expensive thing for a business is labor costs. You need to make sure your labor is extremely productive. They need to go through a K–12 system that has prepared those students well,” Schwenke said.