GJ keeps taxes exempt from TABOR
Grand Junction will continue to exclude a 0.75 percent sales tax, and the city’s less than 1/3 of 1 percent portion from Mesa County’s sales tax, from limits set by the Taxpayer’s Bill of Rights. The move breaks step with Mesa County commissioners, who Monday decided to again include sales tax revenue in their TABOR calculations.
Grand Junction appears to now stand alone among state municipalities to operate this way—yet it may be the only local government with its unique set of circumstances.
During a workshop Wednesday morning, city councilors decided by a 5-2 vote to continue to follow a formula that excludes the tax dollars from calculations, with supporters of the decision contending that voters already have approved a TABOR override during an election in 2007 and received voter approval for the 0.75 percent sales tax in 1989.
New councilors Rick Brainard and Marty Chazen voted to have sales tax dollars subjected to TABOR limitations, while Phyllis Norris, Harry Butler, Jim Doody, Sam Susuras and Bennett Boeschenstein voted to not change the city’s calculations.
Like Mesa County, the city also changed its calculations in 2007 without a public vote. Over the past four years, it’s likely no excess dollars beyond TABOR limits have been collected, because of the lagging economy during that time. But the city’s financial picture was far rosier in 2007 when the city began excluding the taxes.
Between 1998 and 2005, the city refunded excess taxes through temporary mill levy credits. TABOR legislation gained statewide voter approval in 1992. Since then, countless communities have voted to “de-Bruce,” or, go to voters to keep excess revenues. But Grand Junction voters in the past have only allowed TABOR overrides if the excess dollars were targeted for specific projects, or if the ballot question’s time frame presented an expiration date.
City Attorney John Shaver told councilors Wednesday he believes the city can continue to exclude the sales tax dollars because—in the city’s case—it does not violate the letter of the law. A recent ruling upheld this stance, Shaver said, after Douglas Bruce, the author of the TABOR amendment, lost his Colorado Court of Appeals case against the Pikes Peak Library District, a case that challenged the district about raising their mill levy without a vote.
Shaver said he thought the city’s current stance was defensible in court.
“There’s not case law that says we can do this and not a law that says you can’t,” he said. “We could not find anyone else that has the same pattern as us. We are the only one.”
Three local residents—attorney Ron Gibbs, accountant Dennis Simpson and Bill Voss, a former Mesa County finance director—urged city councilors to consider the implications of not including even some of the city’s sales tax revenue in their TABOR calculations.
Gibbs said anytime the city changes its policy on TABOR, there should be a public vote.
The decision to change the policy was made between former County Administrator Jon Peacock and former City Manager Laurie Kadrich, and sitting councilors in 2007 were informed of the change but did not vote on it, Shaver said.
“Do you want to do the right thing?” Gibbs asked. “The voters certainly expect the sales tax should be included. I talked to hundreds of voters who were shocked (that they weren’t included).”
Simpson said case law supports the city subjecting all taxes to TABOR restrictions and added that the first section of TABOR states when there is conflict about whether to exclude taxes, “its first interpretation shall reasonably restrain most the growth of government.”
He said current councilors are only being given a one-sided opinion by city staff, and predicted a potential petition by residents to get a measure on the ballot that would force the city to subject all sales taxes to TABOR restrictions. Simpson said he repeatedly asked for information about when the city changed its TABOR policy, but didn’t get an answer until Wednesday’s meeting.
“Obviously there was an open meeting law violation,” he further charged at the meeting. “I can’t believe you don’t want to go back and say this whole process is flawed.”