Tonight the Longmont City Council votes on whether or not to contribute $7000 to a study on the feasibility, the concepts really, of regional revenue sharing. Lafayette, Louisville, Boulder, Superior and Boulder County have all said okay; Longmont is next and Erie considers this next week.
We debated this topic before (52 comments actually!) and I'm wondering if Longmont will go for it. Actually, Erie may be the holdout with so much of their community outside of Boulder County.
If Boulder County competed as a huge economic entity with cheap transit an housing options funded by the sharing, there appears to be a perfect world" potential. But, with peak oil, open space driving property values and plain old pride in the mix, the study may articulate the impractical aspects of the notion. But hey, lets check it out - more information can't be bad. Creative solutions may hit the table.
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Is real estate tax sharing next? Do not Erie homeowners have a substanially higher tax than say Louisville?
Be careful what you wish for.
I am skeptical on this, considering it is the former 'haves' who turned a deaf ear to this years ago who are now pushing it. However I am interested to see what they come up with and willing to keep an open mind. As the boomers age and turn to buying more services than goods, sales tax will no longer be enough. Don't be surprised if you start seeing new taxes on services being proposed within the next 5-10 years.
I'm also not holding out hope on this concept. I read this as the older, more established cities/towns wishing to grab some of the emerging sales tax in the newer areas of the county. I'll also keep an open mind, but am very skeptical.
Since most of these towns/cities consciously chose to limit growth, I say let them live with their decision. Boulder has for years sent development to the east, now they want to share in the tax revenue? Too bad.
Erie, specifically, should avoid participation in this game. As the one of newest emerging sales tax stream Erie has the most to lose. In the coming few years, Erie will need to shift it's revenue source from fees to sales tax, they sure don't need to share that sales tax stream during this transition.
The trend toward services being taxed is happening around the country as local governments get creative in finding ways to fund their ever-increasing budgets. This will be a tough sell to the voters. Cities/towns will have to inflict pain to change voter opinion.
There are taxes and their are fees. The distinction is starting to blur.
Government will always find a way to raise more revenue just like business does. Only in different ways.
Adding to what has already been said, I also would not be surprised if revenue sharing was a sinker not a floater.
Are fees flat amounts tied to a service rather than variable amounts dependent on amount of goods purchased or value or property? Is that how they differ?
Dreamer, I can explain what I meant between fees and sales tax.
I was referring to fees collected such as development fees, impact fees, etc. All tied to development. Sales tax is self explanatory, is the tax you pay when you buy goods, some local, some state. Some to subsidize private enterprise, like Coors Field.
When referring to potential sales tax on services, we're discussing the possibility that could happen. Currently, there are no sales taxes on services in Colorado.
Several other states do tax services. Our neighbor, New Mexico, for example taxes all labor charges - Dr. bills, lawyer fees, labor to install a sink, and so on. It's called a Gross Receipts Tax, because it's calculated on the gross amount of the invoice, including labor and other service charges. Colorado law currently only allows the taxation of tangible items.
To Frank's point - at the federal level there's an effort to place a permanenet moratorium on internet sales taxes. That's where a ton of revenues will evaporate to (even more so) in the future.
Locally some business owners have told me of the perceived unfair competition by online companies who do not have to include sales taxes in their prices. But their customers have to pay shipping, I say. So they move on to the next point, how they aren't contributing to the local economy. Is this an unfair aspect of the market's evolution, or just the new reality of competition? I'm not going to push for an internet tax, unless we eliminate income taxes and have a national sales tax. But all this is beyond EastBoCo...
I want to see what brilliant premise upon which revenue sharing can be built - what is the source, and where is it located? I'm afraid the concept sounds great when first spoken aloud, but you don't even have to get to small details before the impracticality becomes apparent. There is way too much of an altruistic mindset needed for such a plan, our society isn't there.
Of course, I like how the discussion will shed more light on common goals, which begs the question of our societal values. Not that this means communities will evolve to embrace revenue sharing short of some national economic crisis, but it is still a cool discussion for policy wonks.
22 States have formed a coalition to push for collection of internet sales tax.
A bill was reintroduced in the Senate, the "Sales Tax Fairness and Simplification Act", which seeks to help states in the collection of internet taxes.
NPR has a stringer running around the county preparing tracking the story about revenue sharing.
After we were finished with the opening ceremonies of the new W*M store (four Denver Nugget cheerleaders were there to do the W*M employeer cheer - most of you know the connection), he track me down.
W*M sits on a high point and looking east, you can see Erie and Broomfield. So I told him one of the issues with revenue sharing is that with Broomfield County and Weld County to the east, even if BoCo comes up with something right for it, its the counties out there that can play by different rules, like using laser guided missles while with BoCo uses muskets to complete along the county lines.
When was the last time cheerleaders from a pro team were in Lafayette? I thought the latest highlight was the Oscar Meyer Wiener truch a few weeks ago. (Chuckle).
I don't understand the analogy with missles and muskets. I'm not sure what these "weapons" of economic development have to do with revenue sharing.
However, this just shows why it seems entirely possible that the real bottom line on revenue-sharing is going to get lost in this study process, with all the worry about a master formula for equity and which city is secretly (or overtly) trying to put the squeeze on whatever other cities...
The bottom line, again from my perspective, is whether the amount of revenue being lost to the private sector in incentives outweighs the administrative and equity costs of revenue-sharing to the various local governments. If BoCo communities have a substantially greater pool of revenue collected as the result of cooperation, it's going to be a lot easier to cooperate.
On the other hand, if BoCo municipalities don't stand to gain an advantage or somehow can't avoid dropping the millions of dollars in incentives being offered up routinely today, then it may be possible to conclude that the revenue-sharing program program is not sufficiently advantageous, without getting into speculation about the influence of the regional market.
Thinking about this a little more, it's obvious that you can't ignore the regional market, so I was off on that earlier. Which also clues me in that incentive packages are possibly "missles" and IGAs are "muskets."
So the question to ask is whether the areas that would be opting out (or not subject to revenue-sharing discussions to begin with) have enough pull with the affected BoCo trade area to make the possibility of incentives in "east-of-the-line" communities more alluring than proximity to those customers who live in affected BoCo communities "west-of-the-line."
Obviously, the cost of doing business is on one side that equation, while market share and ability to pass along costs to the consumer is on the other.
In any event, it's the revenue loss to incentives that deserves some detailed analysis. Revenue-sharing as an insurance policy to counteract market cycles and developer speculation is another good reason to explore the proposal, but I don't think it will pan out as worthwhile unless the loss to incentives can be recaptured.
My point which Alex did grasp is that one of the challenges is how to deal with our neighboring counties. They may play the incentive game differently and we get into county "border" competition. So playing by one set of rules with BoCo presents a challenge as to how to compete against another set of rules.
Trying to deal with the competitive approach of an abutting county armed with "muskets" will not work very well if the neighbors have "laser guided missiles".
As you recall the British consider the colonists terrorists because our forefathers fought from behind trees and did not follow the conventions of then "civilized warfare". Business is warfare of a different kind.
In Massachusetts, there were blue laws and sales taxes. New Hampshire had none. Major malls and state owned liquor stores sprung up on the NH side of the common border. MA residents flocked to NH which forced MA to change its laws.
So my only point is to every action is a competitive reaction and that has to be part of the discussion.
My good sir, Councilor Bensman. I believe there is a place for you in our fight against the dreaded laser guided retail attacking us from the plains of this great country of America. Please report directly to the Continental Congress in Philladelphia for deployment to the battlefields of commerce. Thank you for you continued brave service in these most trying of times!
Dear George,
So good to hear from you after all of these years. Your comments verify what the medical profession has longed observed. Corpses are brain dead.
I'd like to thank you for not accepting the offer of your commanders to make you king when the Congress didn't pay them. Ben Franklin reported in Poor Richards Fox News Almanac that the Continental Congress was arguing revenue sharing at the time, showing little gratitude towards the armed forces and your victory.
Since your record as a military commander was somewhat suspect and that major military victory was achieved by attacking a drunken enemy on Xmas eve (how uncivilized), I would value your opinion as how to wage war against the evil Erieites, Weldconians, and Broomfieldians, lest they take their plunder elsewhere and leave us local Lafayettonians exposed to the harsh elements of climate change.
I know I can count on the wisdom of the Father of Our Country, albeit dead for over 200 years, to save us from the barbarian hordes to the east.
Where were you when we needed saving from the tribal menaces to the West and South West? Must we continue to suffer in servitude, offer up tribute, and be taxed unmercifully 'til eternity, i.e. forever?
As the world renown oracles ABBA said decades ago, "S.O.S."
;o)
I know the last post was in jest, Kerry, but to include Erie in a group of “adversaries” along with Weld and Broomfield, just proves my point on the other thread about the latent negative attitudes Lafayette harbors for Erie. Many times real attitudes surface during attempts at humor. No one should be surprised when Moore verbally strikes back at Lafayette.
That aside, interesting to see how attitudes change when revenue streams are involved. Several people discount the "east of the line" impact of BoCo Open Space decisions. But, when it comes to revenue sharing we're concerned about how that could give an advantage to the “east of the line” folks. Open Space, and an underlining anti-growth attitude in BoCo, helped push those rooftops to the east. If quality of life is what we’re really after, why the concern about losing retail development as well? If given a choice, I’d rather have rooftops across the street than a retail center.
Is the revenue sharing discussion any different than the discussion about Open Space? We put ourselves in a unique situation, while surrounding counties ignore our noble cause.
WalMart will open 22 new stores this month, in 13 states. Do you really think these retail juggernauts will stop building stores in BoCo if we stop giving incentives? Retail is very competitive and they won’t give up the market. Will they line Hwy 7 and Hwy 52 in Weld County and stay out of BoCo? No.
D-B,
Back when I was a "civilian", the city council including our current Mayor voted to charge Erie residents an annual fee to use our library. Despite the fact that Erie folks shopped in Lafayette and many had children in our schools, the library argued Erie was causing over use of our library. Erie was caught in neglect by Weld County when it came to library services.
Of course, the library budget was not increased to reflect this new revenue. That went else where. Typical of our finance department.
This fee seemed stupid to me. I wrote a letter to LN protesting this. The director of our Chamber of Commerce responded with an attack letter. (Her husband recently tried to lead the pro-Lowes campaign, denying he was tied in to the $150,000 Lowes campaign.)
After being elected, the council had dinner with the Erie Trustees. I got this item put on the agenda. The Trustees told us Erie folks were boycotting Lafayette businesses, going to Longmont. Our current mayor (who supported the fee) tried to table the discussion to a future date (sweep it under the rug). I wouldn't let him. In the end, Erie paid us a token user fee, the anti-Erie fee was rescinded, and that jump started them on the road to their own library. More importantly, kids from Erie could still use the library with their schoolmates.
For years, the Rec Center charged non-residents, mostly Erie folks, extra as well - supposedly to avoid over crowding. Now because Erie is opening their own rec center, the extra fee has terminated and we have to actually compete to keep Erie residents using our Rec Center. (Or the subsidy will start to increase as paying membership declines.)
I am not anti any abutting city or county. My focus is to make sure that whatever is done, all of the consequences are on the table. Often as you point out, one by one they can add up to an unpleasant mess. (I am often accused of nay saying by pointing out the pros and cons these days.)
For months I have been pressuring city hall about this proposed sales tax ten year bond for road repairs. The financials they put together assumed a perfect world with no more W*Ms within 5 miles of the new one and the proposed Target and Lowes opening up as scheduled and planned.
Now it is known there will be a new W*M at I-25/7 and Target will not be a Super Target. So the tax projections to pay off the bond are bogus. If our tax revenue gets hit by this over the next 10 years, the city will have to cut services or propose an increase in property taxes.
If anyone here wants to get an intellectual ice bath, read Bob Greenlee's column in today's Camera. Note his comments about Open Space (he calls it Closed Space), affordable housing, RTD, etc. Somehow he was a mayor of Boulder for awhile.
Ironically he uses the phrase I often use - folks love things that other people will pay for.
P.S. Every time I take Bandit (my dog master) to our new dog park, I meet Erie folks. They love it. There is free to all. I remind them to shop in Lafayette. They say they will continue to do so. (I was on the Dog Park Task Force). For some things, there can be no governmental boundaries. Especially for kids and dogs.
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