For as long as I can remember, business interests in Colorado Springs and throughout the state have had a simple position on the business personal property tax: Get rid of it!
They have correctly claimed that the tax inhibits business formation, creates disincentives for companies considering a move to Colorado, and unreasonably targets businesses.
It’s tempting to believe that lawmakers at every level have deliberately conspired to milk business for the same reason that Willie Sutton robbed banks: Because that’s where the money is.
If things were that simple, you can bet that the tax would have been x’ed out years ago, when Republicans controlled the governor’s mansion and both houses of the legislature. And why is it still in effect in our fair city, which has been run by Republicans ever since General Palmer drove the city’s first stake in 1871?
Two words: TABOR and Gallagher.
Authored by Douglas Bruce, the Taxpayers Bill of Rights stripped elected officials of the power to raise taxes without voter permission. That’s fine in theory, but it has some unavoidable side effects.
Suppose, for example, that the legislature wanted to get rid of the business personal property tax by making revenue-neutral minor upward adjustments in sales, property, and income tax rates? Revenue-neutral or not, TABOR forbids it.
Moreover, TABOR tends to drive revenue down, for reasons that have been reported ad nauseam for the last two decades.
And there’s another culprit as well; the Gallagher amendment, which mandates a fixed percentage split between residential and commercial property tax collections. Once again, business gets the short end of the stick.
The result: although overall tax rates in Colorado are low, tax anomalies created by TABOR and Gallagher cannot easily be remedied. That’s why governors, legislators, and local governments cling fiercely to whatever revenues they have, knowing well Colorado voters are reluctant to consent to tax increases or tax shifting.
Oh well, that’s life. We may not be able to attract or retain employers such as Intel, as Wayne Heilman pointed out in an excellent piece this Sunday, but we’ve avoided the fate of New Jersey. We don’t have sky-high taxes,insane spending on public employee benefits, a bloated public workforce, and crumbling, dangerous cities. We don’t have to abandon half-built multi-billion dollar public works projects, such as the Hudson River railroad tunnels.
Nope, we learned our lesson a long time ago-let the private sector take those risks!
Don’t believe me? I’ll sell you my 100 shares of the Pikes Peak Tunnel Mining Railroad Company, dated 1896. A group of local entrepreneurs, headed by one George Proctor, floated the stock issue with the intention, so they claimed, to build a railroad from Manitou to Cripple Creek via a tunnel beneath Pikes Peak.
Still a great idea, don’t you think? Maybe we could build it with the federal funds that were supposed to be used for the Hudson River project…