Local government would, in effect, be largely defunded.
County Administrator Connie Hunt, who will begin drafting the 2011 Ouray County budget next month, has been crunching numbers, reporting her findings to the commissioners at a meeting Monday in Ridgway.
Proposition 101, also titled The Colorado Motor Vehicle, Income and Telecom ballot initiative, would require all motor vehicle registration, license and title changes be reduced to a total of $10 per year, per vehicle. The initiative would also lower the state income tax rate immediately to 4.5 percent and phase in a further reduction in the rate to 3.5 percent.
Proposition 101, should it pass, would affect three revenue sources the county counts on, including vehicle ownership taxes, license fees and FASTER road and bridge fees. Using research and statistics by the Bell Policy Center in Denver and the Colorado Department of Revenue, Hunt said in the four years after Proposition 101 would be implemented, vehicle ownership taxes collected in Ouray County would drop from $606,154 in 2010 (using 2009 revenues) to $9,492 by 2014 – a reduction of 98.4 percent.
Those taxes fund a variety of entities. Should it pass, the Ridgway, Ouray and a small portion of Montrose school district revenues would drop from approximately $277,012 in 2010 to $4,338 in 2014. Ouray County’s revenue from those taxes would drop from $156,994 to $2,458; the City of Ouray and the Town of Ridgway’s revenue from those taxes would drop from $42,431 to $664; the area’s fire district funding would drop from $30,914 to $484.
“That is scary,” Commissioner Heidi Albritton said.
Proposition 101 would also affect the license fees the county collects, down from $438,467 in 2010 to $79,100 in 2011. While the effect of the drastic drop in license fees wouldn’t hit the emergency medical, peace officer training and insurance database funds, revenue to the Highway User Fund would drop from $48.33 (per vehicle owner) to $2.90, should the initiative pass.
According to the report, like all counties in the state, Ouray County has started collecting road and bridge fees to pay for a backlog of state construction and repair projects through FASTER funds. Proposition 101 would repeal that funding, and Ouray County would lose a projected $173,569 for roads and $69,042 for bridges.
Amendment 60 proposes to limit how property taxes are raised and reverse recent tax laws that have increased taxes. It would cut mil levies in half by 2020 and apply a 10-year limit on future property tax increases.
According to Hunt’s report to the board, if Amendment 60 were to pass, it would cause the overall county mil levy to be reduced by 3.207 mils and would mean a revenue reduction of approximately $674,287, using the 2009 assessed valuation.
Should both Proposition 101 and Amendment 60 pass, Ouray County alone could stand to lose over $800,000 in revenue.
“This is very huge,” Commissioner Lynn Padgett said, “and this is still not diving into the situation at the state level or school levels.”
Looking at the reduced revenues for the county’s Road and Bridge Department, Padgett said that department’s rock crushing, road grading, magnesium chloride and snow plowing budgets will all be cut drastically.
“We will have lost almost everything with it and more,” she said. “No crushed rock, no mag chloride and not really plowing roads.”
“We will literally have to go through each fund and have a hard-core discussion about the services we provide and the cost of those services,” Albritton said. “I feel like we are already pared down. We would be down to basically clearing roads for school routes and not an awful lot more.”
On top of that the commissioners contemplated the mass reduction in revenues to the county’s general fund and the reduction in employment the county would face.
“It is a lot of salaries,” Albritton said.
As if the potential impacts from the possible passage of Proposition 101 and Amendment 60 hadn’t already painted a grim enough picture for the commissioners, Amendment 61 would prohibit any borrowing by the state or local governments and would require voter approval for future loans.
Hunt said if Amendment 61 passes, once any county debt is paid off, the county must reduce its mil levy to reflect that decrease in revenue equal to that amount.
While the amendment, should it pass, would have an effect on Ouray County, Commissioner Keith Meinert said that Ouray County is well-positioned to handle the changes, since it has relatively low debt.
“[Larger counties] will have had a much greater debt load than we do now, and Amendment 61 will have affected them a lot more,” Meinert said.
Amendment 61 will require voter approval for the county to make lease purchases, but, according to County Attorney Mary Deganhart, the county could work around that rule by simply leasing, say, a vehicle, rather than a lease purchase and wouldn’t have to go to voters for approval.
Hunt said she will be preparing two separate 2011 budgets over the next month, one using numbers assuming all the ballot initiatives pass, and another for if they all fail. The commissioners are planning to draft a resolution outlining the impacts the initiatives could have on the county’s budget, and the services it may have to drop, should they pass.
“We must have a budget, one if they do pass and one if they don’t,” Meinert said. “We need to provide a list of services that we can provide if they do pass and if they don’t. That is merely a factual presentation of possible impacts. We have to do that.”
As Hunt begins to prepare these budgets, she plans on preparing the county’s department heads for the worst.
“I am not, by nature, a negative person,” Hunt said. “I am a planning person. If it does happen, we need to be proactive.”