Vail Valley Partnership (VVP) focuses on developing and enhancing the economic vitality of the Eagle County. In the simplest of terms, this means serving as the voice of business, via our role as advocates and a trusted source and information repository for the business community.
We seek to build a business-friendly Eagle County and the state of Colorado that allows businesses to fully compete for customers and market-share based on the goods and services they provide.
VVP’s legislative strategy is to support policy proposals that fit our mission and oppose measures that detract from our goals. Our Government Affairs Committee and Board of Governor’s use these broad criteria when determining positions on policy issues:
- Does the proposal enhance the broad competitive business environment?
- Does the proposal help maintain or enhance an environment conducive to business and a level playing field for businesses in the Vail Valley now and into the future?
- Does the proposal provide the opportunity for competitive business practices regardless of the size or age of a business?
It is within this context that the Board of Governors of the Vail Valley Partnership has taken the following positions:
Statewide Ballot Issues
Amendment B – Modify Property Taxes
This was referred by the state legislature in a bi-partisan vote. Numerous rural Republicans were key sponsors.
A YES vote repeals the Gallagher Amendment, which impacts the residential assessment rate for which property taxes are calculated. The assessment rate will remain constant and future decreases will not be required.
A NO vote keeps the Gallagher Amendment.
The Gallagher Amendment is complicated.
The Gallagher Amendment, passed in 1982 to limit then-skyrocketing residential-property taxes, says only 45% of the state’s property tax revenue can come from residential properties. The other 55% comes from commercial and industrial properties, including oil and gas, which are declining in value. State projections show oil and gas values are down 30% and commercial values are down 20%.
This will cause the residential assessment rate to fall from 7.15% to 5.88% despite home values being up 10% from the last time the legislature was forced to set this rate according to the latest projections.
If residential property taxes decrease, local governments, police, fire, schools, libraries, anything that your property taxes pay to fund, will likely receive fewer dollars. On the other hand, you’ll pay less in property taxes.
PARTNERSHIP POSITION: SUPPORT
RATIONALE: The Partnership board has historically supported removing all formulas from our constitution. Due to growth in our residential market, the Gallagher formula has forced an imbalance in property taxes in Colorado, causing a 300% increase in the shift of the property tax burden from homeowners to business owners. This has resulted in public safety, transportation and education budget crises for local communities across our state, especially in rural Colorado. Repealing Gallagher stops this continual shifting of taxes to the commercial properties in our state, providing more predictability for businesses.
Proposition 116 – State Income Tax Rate Reduction
A YES vote reduces the state income tax rate from 4.63% to 4.55%.
A NO vote keeps the state income tax rate at 4.63%
PARTNERSHIP POSITION: OPPOSE
RATIONALE: Colorado’s income tax rate has not been a hurdle in our economic development efforts. Lowering our taxes at a time when we need investment in critical issues such as transportation and higher education is counterproductive. This reduction would force an estimated $150 million per year in budget cuts on top of the significant revenue shortfall we already face. Additionally, the state often turns to businesses to recover revenue for its operations and this would likely result in negative implications for the business community.
Proposition 117 – Voter Approval for Certain New State Enterprises
A YES vote requires voter approval for new state government enterprises with fee revenue greater than $100 million in the first five years.
A NO vote keeps state enterprise authority with the state legislature.
Enterprises are user-funded entities, like the University of Colorado, Colorado State University, the Colorado Lottery and Colorado Parks and Wildlife.
Enterprise status can affect the state budget. Picture a bucket. The bottom of the bucket is filled with fees. On top of the fees is the tax revenue the state collects. Based on the Taxpayer Bill of Rights (TABOR), there is a formula that dictates how much the state is allowed to collect and spend year after year. By creating an enterprise, it takes that entity out of the bucket, perhaps giving the state more money to spend on schools, health care, corrections and other state-funded departments.
Enterprise status also grows the state budget and currently is overseen by state lawmakers. If voters had a say before an enterprise was established, it could give voters more say in how much state government grows.
PARTNERSHIP POSITION: OPPOSE
RATIONALE: Fees, when properly identified as fees, can and should be utilized to help fund specific initiatives directly tied to those fees. To be clear, this doesn’t mean everything that someone calls a “fee” meets that criteria. That said, if a proposal clearly qualifies as a fee, we believe voter approval should not be required.
Proposition 118 – Paid Family and Medical Leave Insurance Program
A YES vote creates a paid family and medical leave insurance program, funded by employees and employers paying a premium.
A NO vote means no paid family and medical leave program will be implemented.
This insurance program would provide up to 12 weeks of paid family and medical leave starting in 2024. Employees and employers would split the premium 50/50 starting in 2023, to fund the program one year ahead of it being implemented.
If passed, this requires employers and employees to pay a 0.9% payroll tax that would be deducted directly from employee wages in order to fund the insurance program. It would create a 200-person department within CDLE which would be managed by a political appointee. The Department would have wide discretion to increase the payroll deduction to as high as 1.2% of wages if program usage is higher than anticipated.
The Colorado General Assembly has consistently rejected similar approaches to paid leave in five recent legislative sessions.
PARTNERSHIP POSITION: OPPOSE
RATIONALE: While we support paid family and medical leave, we do not believe a state-run program that mandates a one-size-fits-all approach for small businesses up to large corporations is the answer. This initiative is costly for both employees and employers at a time when many are struggling to keep teams employed, are working to rebuild or even just trying to stay afloat in this economy. Plus, employers are still adjusting to the new federal rules about paid leave that were released shortly after the pandemic hit. This is a blunt instrument when we need a more customized approach.
Local Ballot Issues
Local Issue 5B – Eagle County Schools mill levy renewal.
- No new taxes.
- Removes sunset on 8 million in revenue (sunsets in 2023).
- Removes public oversight committee, transitions to private oversight firm and reporting to public.
- Impact is 8 million annually for our schools.
PARTNERSHIP POSITION: SUPPORT
RATIONALE: VVP supported the original mill levy and believes that Eagle County School District has been fiscally responsible with taxpayer dollars. The budget reduction would be detrimental to the district’s ability to attract and retain talent. Additionally, uncertain budget conditions exist at a state and local level due to Gallagher. Eagle County Schools has been an example of transparent & thoughtful leadership during the COVID pandemic and deserves continued funding support at current levels.
Eagle County, Town of Vail, Town of Avon, Town of Eagle, and Eagle River Fire Protection District: Gallagher Amendment “De-Gallagher” requests
As noted above, the Gallagher Amendment has codified a higher commercial property tax rate relative to the residential rate. Local towns and districts are appealing to voters to “de-Gallagher” on a local level to maintain mill levies on residential.
PARTNERSHIP POSITION: SUPPORT
RATIONALE: Similar to Amendment B, with the additional understanding that local districts and towns budget reductions will impact local services and that up to 50% of residential property taxes are paid by second homeowners. Quality of life provided by these local government services outweighs the lack of property tax reduction. De-Gallagher makes sense to ensure local services and future capital projects are properly funded. Reducing government funding during a pandemic increases the likelihood of a delayed recovery.
Colorado River District (15 county region)
Shall Colorado River Water Conservation District, also known as the Colorado River District, taxes be increased by an amount up to $4,969,041 in 2021 (which increases amounts to approximately $1.90 in 2021 for every $100,000 in residential property value), and such amounts as are generated annually thereafter from an additional property tax levy of .248 mills (for a total mill levy of 0.5 mills) to enable the Colorado River District to protect and safeguard Western Colorado by:
- Fighting to keep water on the Western Slope;
- Protecting adequate water supplies for West Slope Farmers and Ranchers;
- Protecting sustainable drinking water supplies for West Slope communities; and
- Protecting fish, wildlife, and recreation by maintaining river levels and water quantity;
Provided that the District will not utilize these additional funds for the purpose of paying to fallow irrigated agriculture; with such expenditures reported to the public in an annually published independent financial audit; and shall all revenues received by the District in 2021 and each subsequent year be collected retained and spent notwithstanding any limits provided by law?
PARTNERSHIP POSITION: SUPPORT
RATIONALE: Water is a key factor facing our region and at some level, community and environmental issues are also business issues – and there is no larger issue for the future of our community and Colorado’s western slope that water. A case can be made that water policy has immense impacts on our community for both recreation and quality of life. The Partnership recommends support for the district as water is a huge factor for our future growth and our economic well-being now and in the future.