Fate of nearly $2 million in excess revenue in voters' hands

City wants to spend extra on roads, also wants to increase future cap

Posted 8/7/17

Littleton voters will decide this fall whether to allow the city to keep money collected in excess of a state-imposed cap on revenue, and whether to adjust the revenue cap going forward.

The city's ability to collect money is constrained by the …

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Fate of nearly $2 million in excess revenue in voters' hands

City wants to spend extra on roads, also wants to increase future cap

Posted

Littleton voters will decide this fall whether to allow the city to keep money collected in excess of a state-imposed cap on revenue, and whether to adjust the revenue cap going forward.

The city's ability to collect money is constrained by the 1992 Taxpayer's Bill of Rights, or TABOR amendment. The law sets a cap on the money the city can take in, calculated by a formula of the city's 1992 revenues plus adjustments for inflation in the Consumer Price Index and the increase in population. Any revenue collected in excess of the cap must be refunded to taxpayers, unless voters approve a waiver of the refund.

Littleton's TABOR cap in 2016 was $67 million, but a high amount of impact fees and building use taxes, which are one-time payments related to new development, allowed the city to collect more than $69 million, creating a surplus of $1,937,904.

Resolution 5(b), approved unanimously by the city council at its Aug. 1 meeting, creates a ballot measure that, if approved, would allow the city to keep the excess revenue, which would be earmarked for two projects: $1,392,904 would go to pavement improvements on residential streets, and $545,000 would go to intersection safety upgrades to the intersection of Bowles Avenue and Federal Boulevard.

The extra revenue would increase the length of streets due to be resurfaced from 3.4 miles to seven miles. The intersection project would focus on improving traffic movement, alignment and pedestrian safety.

If voters reject the city's request, the surplus funds will be divvied up among taxpayers, though TABOR does not actually spell out a refund method.

The city has gone to voters asking to retain revenue in excess of the TABOR cap on six other occasions. Voters passed five of the waivers by wide margins, with only the 2006 effort being turned down. In that case, the excess of $1.1 million was refunded to taxpayers, with voters receiving $20 each and property owners receiving $41.49 a pop.

Previous excess amounts kept by the city have gone to a variety of projects, including safety improvements to Santa Fe Drive, purchase of open space, upgrades to fire stations and expanding the Littleton Museum.

Resolution 5(c), approved by a 6-1 vote with Mayor Bruce Beckman the lone vote against, creates a ballot measure that, if approved, would ratchet up the city's TABOR cap going forward from $69 million, the amount it would increase to according to TABOR's algorithm, to $71 million.

If the measure is not approved, the cap would still increase, just not as quickly. In that case, possible future revenue excesses would likely go before voters again.

Councilmember Doug Clark said he likes that TABOR gives citizens a voice in how government spends its money.

“I'm a big fan of TABOR and a big fan of limited government,” Clark said. “TABOR's purposes are to limit government, but it contains the provision for the citizens to decide if they want to increase the size of government for a specific reason. TABOR puts the decision in the citizens' hands.”

Beckman said that he based his vote on a concern that adjusting the TABOR cap is a confusing issue, and not one he sees as a pressing matter.

“It has nothing to do with a distrust of the citizens, or a distrust of TABOR, but if it's so confusing that we need an attorney and seven of us up here to figure it out, I don't know if it needs to be included,” Beckman said, referring to a lengthy discussion between the council and the city attorney on the measure's merits. “If we find ourselves exceeding the cap again in the future, we can go to a vote again.”

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