Steamboat Springs Balancing the city budget may prove an especially daunting task this year, due to a tax proposal from anti-tax crusader Douglas Bruce of Colorado Springs.
Bruce has proposed a tax cut initiative that, if approved Nov. 7, could sap local governments in Colorado of precious franchise fees, municipal officials say. Steamboat Springs alone could lose up to $500,000, said City Manager Paul Hughes.
"We would have to go back to the drawing board and make substantial cuts. We might even have to start over depending on what we think we'd lose in revenues," Hughes said. "This is having a very bad effect on city budget planning."
This year's budget was $28.18 million, said Finance Director Don Taylor, who was unable to give tentative figures for 2001 as of yet.
Barring major disruptions, next year's budget should be set by Oct. 3. For the time being, Hughes and officials from the finance department are meeting with department heads to go over preliminary budget requests. The finance department must decide if total projected revenues will be able to pay for departmental requests.
At the moment, departmental budget requests are at least $4 million greater than expected revenues for next year, Hughes said. That amount of overestimation is to be expected and will be pared down in the coming weeks, he added.
"We're fine-tuning some of the requests," Taylor said. "There's always more to do to determine the resources available."
Taylor was unable to comment on major capital improvement expenses.
After substantial increases in salaries in some departments in this year's budget, salaries are expected to remain relatively stable, said John Thrasher, the director of human resources. This year's salaries were adjusted due to a salary survey that pointed out some departments in which city compensation was lacking compared to other cities. Police officers, for instance, received a pay raise this fiscal year.
"The salary increases helped us retain people," Thrasher said. "We've also been getting candidates of a little higher caliber."
Thrasher said that the city is not planning on doing another salary survey this year.
After preliminary cuts are made this week, the city will write a second draft of the budget by next week. After meeting with department heads again, Hughes will make final adjustments and calculate more exactly projected revenues and expenditures. The city has projected revenue garnered from sales taxes to grow about 3 percent next year, Taylor said. Revenues are traditionally underestimated by the finance department in order not to end up with a deficit early in the year. If the city has a surplus, officials will decide where to allocate it in July of next year.
Two months of work may go out the window, though, if Douglas Bruce gets his way.
Bruce's tax cut initiative, called Amendment 21, may throw a wrench in city budget planning.
Bruce has proposed a $25 cut on a variety of Colorado local tax bills. Among those bills are utility bills collected from companies such as Yampa Valley Electric Association, AT&T Cable and Greeley Gas. The cuts would increase $25 every year.
Bruce is known for having authored the Taxpayer's Bill of Rights (TABOR) in 1992.
He told Steamboat Today that his newest ballot initiative is meant to give taxpayers a vote in determining tax decreases.
"TABOR gave people the chance to vote on tax increases. This new amendment balances out the picture to allow people to vote on tax decreases," he said.
Bruce explained that, according to the language of the ballot question, the state will be obligated to pay for any revenue lost at the local level.
"The question calls for state replacement of local revenue," Bruce said.
Hughes, however, contends that Bruce's initiative doesn't require the state to pay the difference.
"From what I've read, there is absolutely no obligation on the state's part to provide a single dollar to so-called backfill," he said. "State legislators have said they don't have to. We're very, very concerned."