FLOOD05130 - Laserfiche WebLink

Home Browse Search

FY 82-83 if no expenditures are made from the fund during the fiscal year. An expenditure of monies in the fund for water project construction has never been made. Property Taxes; Section 11 of Article X of the Colorado Constitution permits the state to levy a property tax of up to four mills, with an additional one mill levy for the erect ion and maintenance of builnings at state educational institutions. Although used previously, this state assessed property tax was phased out in the 1960s. At current property valuations, a one mill levy would generate about $15 million per year. General Obligation Financing The above sources of tax revenues are not insubstantial. However, these must be measured against all capital investment needs facing the state, as well as the hundreds of millions of dollars of needed water project construction and rehabilitation, including "up-front" cost-sharing on federal projects. When viewed from this perspective, the historical policy of "pay as you go" may not be respons ive to the capital intens ive requirements of water proj ect development andrehabilitat ion which must be addressed over the next two or three decades. I f "paying as you go" is found to not meet Colorado 's captial investment needs, then serious consideration must be given to commencing a general obligation financing program. Implementation of such a program would require two things: (1) Amendment of the State Constitution, which presently specifies that "the state shall not contract any debt by loan in any form," except in a very few instances (Section 4, Article XI), and (2) Pledges of specified future tax revenues which would be used to retire any indebtedness for want of suff icient project revenues. With respect to pledges of future tax revenues, there are, as discussed above, several possible sources. However, not all taxes are equally attractive for general obligation financing purposes. This is because the amount of capital which can be borrowed is a funct ion of the ant ic ipa ted stabil i ty of the tax revenues which are pledged to retire the indebtedness to be incurred. The more stable the tax revenues are expected to be, the lower the revenue to annual debt service ratio requirement will be. For example, property taxes are regarded by investment bankers as the best source of pledged revenues. Thus, for every $3 of property taxes pledged, about $1 to $1.25 of capital can be -8-