Tale of two tax records
Vail, CO Colorado
EAGLE COUNTY, Colorado ” Property taxes and spending are among the top issues in debates and discussion in this year’s commissioners race.
Republican candidates Dick Gustafson and Debbie Buckley have criticized the current board for taking a more than $7-million increase in property taxes, a result of property values rising almost 38 percent last year.
Current commissioners, including Democrat Peter Runyon ” who is running against Gustafson for re-election ” decided not to lower the county’s mill levy and kept the increase.
Runyon and Democrat Jon Stavney, who is running against Buckley, justify the increase, saying that the county only takes a small portion of the total taxes ” about 15 percent. Also, they point out, the extra funds are needed at a time when the county is quickly growing.
A state law known as the Taxpayer’s Bill of Rights (TABOR), limits how much increased tax revenue a government can collect each year and requires a public vote in order to increase the tax rate.
The county became exempt from the limitations by a public vote in 1995, but still cannot increase the tax rate without a public vote. That requirement keeps the county from lowering the mill levy because it has no guarantee it can raise the levy later if necessary, Runyon said.
However, the Republicans say that the county should lead the way in decreasing its portion of taxes and criticize what they have called “unnecessary spending” by the current board.
Both Republican candidates signed a pledge committing to work for lower taxes and reinstating TABOR.
The tax records of all the candidates from their time serving at the county or the towns still stands ” what did they do as commissioners, town council members and mayors?
This article takes a look at Gustafson’s term as county commissioner (1984 to 1993) and Runyon’s terms (2004 to present). Look for an article next week comparing Stavney’s time as Eagle mayor and Buckley’s two terms on the Avon town council.
Gustafson has said that he would have lowered property taxes last year and points out that he lowered the mill levy several times in his time as commissioner.
In fact, Gustafson’s board did lower the mill levy four times ” in most cases the lowered rate still resulted in a very modest increase in county revenues.
However, his board also raised taxes four times, and over eight years, county revenues went up an average of 8.65 percent each year.
The increases in his last three years were largely due to a voter-approved bond issue to build the county building, Gustafson said.
“I don’t have problems with things that are voter-approved,” he said. “That’s not the issue.”
The county experienced a similar jump in assessed property values in 1988 ” assessed values jumped by 115 percent. Commissioners cut the mill levy almost in half that year.
“It’s a parallel to the current situation,” Gustafson said. “We did exactly what they should be doing now.”
However, Gustafson’s term also had years of significant revenue jumps. County tax revenues went up 14.6 percent in 1985 and 25.2 percent in 1990.
The increases in 1985 were due to unexpected costs in building the county justice center, which was approved by the previous board.
The costs for the project, which was supposed to be covered by a voter-approved bond, came in much higher than expected, said Gustafson.
In 1990, assessed values decreased slightly, and commissioners voted to raise the mill levy. According to a 1989 article in the Vail Trail, commissioners cited ballooning health insurance costs and the need to beef up depleted fund balances as reasons for the increase.
Also, the county said it needed money to pay for more county vehicles and to save for expanding the Justice Center, which was already proving to be too small.
However, in the same year, the county saw a 25 percent increase in sales tax revenues, resulting in a more than $1 million increase for the county. The money, which is split between the general fund and capital improvements and were needed for immediate projects, according to articles at the time.
“We were coming out of a recession, and the money was needed for basic operations, the cost of mandated services, and things like employee health insurance,” Gustafson said.
He said he doesn’t see any good reasons for how the current commissioners are using the increase.
“I don’t see any justification for them taking it this year,” he said. “I see a lot of frivolous discretionary spending where they could easily have cut the costs.”
He said examples of unnecessary spending include the county has investing $4.5 million in workforce housing at Stratton Flats, hiring various consultants, spending more than $800,000 in early childhood development programs and paying for the design of a new county logo.
While Runyon has neither raised nor lowered the county tax rate, tax revenues increased an average of 12.7 percent each year during his term. The only mill levy raise in recent years was a 1.5 mill open space tax that was approved by voters in 2003.
The biggest increase was from last year, and county revenues also increased by almost 10 percent in 2006. The other two years saw had very slight increases due to small increases in property values.
Runyon argues that the current board cannot easily lower and raise the mill levy because of TABOR laws.
He said the board, before TABOR laws, used the mill levy as a budget balancing tool, raising it when funds were needed, and lowering it when the budget was fine, all without public votes.
“Would they have (lowered the mill levy) then, knowing they couldn’t just as easily have moved it back up?” he said.
He also defended the current board’s spending decisions.
He said spending for Stratton Flats comes down to a “fundamental difference in beliefs.”
Gustafson has said that workforce housing should be left to the free market, while Runyon said he believes the county must intervene.
“I’ve lived here 30 years and the free market has never suddenly produced deed-restricted, affordable housing,” he said.
Hiring consultants is a common practice when making decisions out of the commissioner’s expertise, Runyon said.
“The county is a lot more sophisticated now. It’s a different time and a different era,” he said. “When you get to an area in which you’re not up to speed, you absolutely hire a consultant.”
In fact, the county hired Gustafson as a consultant when building the regional airport, Runyon said.
He also said he did not vote to approve the design of a new county logo ” it was a 2-1 vote, with Runyon as the dissenting vote.
The county has proved it is fiscally responsible, as evidenced by a recent upgrade in credit ratings from national credit companies, he said.
The county was raised two grades in credit ratings, giving it a grade that is among the best for a municipal government.
“That doesn’t happen when you’re fiscally irresponsible,” Runyon said.
He criticized some of the spending decisions of Gustafson’s board also. While the county building was voter-approved, the board also built it with a no-bid contract.
It is also one of the nicest county buildings in the state, and is difficult to expand because of the design, he said.
“Compare it to Garfield’s and Summit’s county buildings ” they look like government buildings,” he said. “It’s the most expensive county building in the state, with what is basically a throne room, mahogany doors and brass fixtures. Is that fiscally responsible?”
He admits that with a downturn in the economy, he would take a different approach to the budget and county spending.
“There are absolutely things we did last year that would be different this year,” he said. “Over the next period of time, we just have to be very cautious and careful. We’re looking at a number of scenarios, with the potential of much less income to the county.”
Staff writer Melanie Wong can be reached at 748-2928 or email@example.com.
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