Ferry: Take a closer look at Prop 123
Valley Voices
I think we need to take a closer look at Proposition 123 before we check the yes box. Most of us will have a knee-jerk reaction to this prop. We can’t wait to do what we can to create more affordable housing. Almost everyone agrees that we have a problem and any solution is better than no solution.
But what if this solution has no guarantee that our tax dollars will come back to solve our housing problems in Eagle County? Prop 123 isn’t a new tax — Colorado’s income tax rate would remain unchanged. But it would reduce the amount of money that can be refunded to voters — which is why it’s been likened to a tax hike.
Let’s back up a bit so I can explain my two criteria for any tax:
- It must very explicitly define its use.
- It must have a sunset — meaning it must have a date when it expires so we can analyze its effectiveness and the need to continue or not.
So first, let’s see if it even meets the definition of a new tax. The answer is no, but it’s really just smoke and mirrors.
Let me explain. While the state is already collecting these funds, therefore not creating a new tax, these funds are being diverted from excess TABOR funds which under current regulations are returned to the taxpayer. So understand this: You know that $750 you got this year as an excess TABOR rebate? Kiss that goodbye, because that money will be redirected to this new affordable housing fund which gets its share before you get yours.
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How does that grab you? So, while it’s not technically a new tax, it’s still money that would normally be returned to you but now goes for housing. That sure feels like a tax.
It gets worse. Prop 123 also mandates that if there are no excess funds, this money will be taken out of the general fund. Due to balance budget requirements in the State of Colorado, that means money will be taken out of somewhere else to satisfy Prop 123. Roads? Schools? Health care? Who knows.
Now we’re to the issue of an explicit definition. Oh yes — there are plenty of defined uses, but nowhere is there a guarantee that any of those uses will benefit Eagle County. Nowhere does it say that money collected from Eagle County will return to Eagle County to solve Eagle County housing issues. That decision will be based on whatever guidelines the legislature uses to determine which municipalities have the greatest need. And if things follow historical patterns, the legislators will push for funds for their districts, which means the likelihood is that the Front Range will get the bulk of this revenue.
The explanation is what it always is — trust government to make these decisions once the bill is passed. Does that sound familiar? It mimics one of the most memorable lines of all time: “We have to pass the bill, so that you can find out what is in it — away from the fog of the controversy.” That didn’t work for me then and it doesn’t work for me now.
That takes us to a sunset provision. You might wonder why that’s important.
It is rare in our daily lives that we make decisions that do not need to be reviewed at some time. We continuously reassess the decisions we make and where adjustments need to be made — on budgets, vacation plans, kids’ allowance, and investments. It’s endless but necessary.
Why not the same with government? A sunset clause does not mean a tax will end or in this case, the use of excess TABOR funds. It simply means that we will review what it has accomplished, but more importantly, decide on if it should continue. If it has met its goals and the need still exists, we can vote again for the diversion of these funds. One rule you should never forget is once government puts a plan in place, rarely does it review decisions and make corrections.
So, we’re back to square one. With no explicit definition in place as to its allocation and no sunset to set a future date for review, there is no way I will vote for Prop 123 and neither should you.
Let’s wait until the next election and demand more specificity. Better that we wait and get it right than be permanently saddled with a decision that does not clearly benefit Eagle County.
Any thought that we should trust the government to do what’s best for us is naïve and foolhardy — especially with regard to this ballot question when we know the legislature is dominated by Front Range lawmakers. Demand more. Vote no on Prop 123.
Kaye Ferry is a longtime Vail local.