BOARD00489

• Board Meeting Date: 7/24/2000
• Description: Impacts of Initiative 205 on Water Districts
• Board Meetings - Doc Type: Memo

separately listed on tax bills), or just to that government's total levy? Does the sales tax
cut apply only to motor vehicles? Would the tax cuts apply to separate bond levies even
if repayment of the obligation were jeopardized? e

On his website (www.taxcut2000.com). Bruce contends that the proposal requires state
government to replace local revenues lost to the escalating tax cuts. The language that
might mandate this replacement appears to have been lost "on the cutting floor." The
only apparent mandatory language is that successful plaintiffs' attorneys shall always be
paid their fees and costs and that these tax cuts and any money that the state might
appropriate to replace local revenues shall not reduce any TABOR excess revenue.'
Despite this void, it is no mystery that Colorado's School Finance Act will require the
legislature to replace most of the property tax revenues lost to school districts. There is
no such replacement provision, either in statute or the constitution, for other kinds of
local government.

Nevertheless, at least one part of the proposal seems reasonably clear.' It would require a
first year reduction of$25 (probably only to the extent of the tax due-there appears to be
no requirement for a refund if the tax due is less than $25) in the property tax due for each
government that levies a property tax.

The annual property tax bill received by a typical homeowner is itemized to the extent of
providing the amount of tax due for each jurisdiction within which the property is
located. A sample of one such bill for a home of$139,100 actual value in Aurora
(Arapahoe County) shows: e

Cherry Creek School District 5
Arapahoe County
Arapahoe County L.E.A.
Arapahoe Park & Rec Dist
Arapahoe Library District
Cunningham Fire Dislrict
E. Cherry Creek Water & S
Urban Drainage & Flood
Total Levy

$719.41
185.72
67.51
27.74
51.99
199.14
85.96
8.88
$1,346.35

1 Allhough Bruce's website complains about "bloated bureaucracy", the language that says the tax cuts mandated
by TABOR 205 shall not reduce TABOR excess revenue promises to create an accounting nightmare. if not actual
bureaucracies. Apparenlly each government will have to keep two sets of books, one showing revenues before the
mandaled tax cuts for the purpose of computing TABOR excess revenues, and anolher sel of "aclual" books showing
revenues after the tax cuts.

2 The rest of this report assumes that the $25 reduction applies only to the total property tax bill for each e
"district" or taxing entity. It seems at least arguable that it might apply to each separate levy even though some are
consolidated on tax bills. For example, Arapahoe County has separate levies for its general fund, road and bridge, public
welfare, capital expenditures, and lhe Boulevard Plaza property lease/purchase, all of which are combined into the one
Arapahoe County line item on tax bills.

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