Weld County School District Re-4

Long Range Facility Planning Committee

November 2010 Ballot Initiatives

Overview and Implications for Weld Re-4

September 21, 2010

Picture taken 12-3-07

The Three Initiatives

Amendment 60 – cuts SD property taxes in half

Amendment 61 – borrowing limits

Proposition 101 – state income tax & vehicle taxes

Note: Six other initiatives will also be on the ballot.

General effectsWeld Re-4 effects

Amendment 60 Provisions (Nine)1. Overturn ALL property tax increases

approved in local elections since 1992; 2. Limits tax rate increases to 10 years

and requires periodic re-approval (no more than 4 years) of subsequent property tax increases;

3. Cut local school district property tax rates in half over 10 years;

4. Replace local school district property taxes with state revenue;

5. Require government owned businesses (e.g. community colleges) to pay property taxes, which MUST be offset by lower local property tax rates;

Amendment 60 Provisions – Con’t.

6. Allow electors to vote on property taxes in any district in which they own real property;

7. Require that elections on property taxes be held only in November;

8. Prohibit related tax and debt issues from being included in the same ballot measure, even where the taxes will repay the debt;

9. Permit voters to petition any local government to reduce property taxes; and

10.May increase severance tax collections to offset property tax deductions.

Fiscal Impact Summary First Year* Fully

Implemented*

State Revenue General Fund at least $0.9

million at least $8 millionState Expenditures General Fund $338 million $1,469 millionFTE Position Change 1.5 FTE 1.5 FTE

Local Government Impact: See Local Government Impact section.* All figures for state expenses and revenue are reflected in today's dollars. The first year of implementation is

FY 2011-12. The measure is fully implemented in FY 2020-21 .

Fiscal Effects on State:

Fiscal Effects on School Districts: (millions - statewide)

Source: Colorado Legislative Council.

Type of School District Property Taxes

Current Law

Amendment 60

Difference

Property Tax Revenue to Repay Debt

$762 $762 $0

Property Tax Revenue to Operate Schools

$2,513 $1,257 ($1,257)

Total Property Tax Revenue $3,275 $2,019 ($1,257)State Expenditures for Public Schools

$3,746 $5,003 $1,257

Effects on taxpayers:

Source: Colorado Legislative Council.

Property Tax Differential

  Year 1

Full Implementatio

n

Home Value$

295,000 $ 295,000 Property tax reduction (annual) $ 87 $ 376

Commercial Value$

1,100,000 $ 1,100,000 Property tax reduction (annual) $ 1,181 $ 5,106

Amendment 61 Provisions

Effects on State: Prohibits state from borrowing in any form:

• “The state shall not contract any debt by loan in any form.”

Note: state already prohibited from using GO debt

Must accumulate funds and pay for expenses up front

Effects on Local Governments: Limits GO debt to 10% of assessed value Elections only in November Debt must be repaid within 10 years Borrowing must be issued with ability to be

repaid at any time After repayment, taxes must be reduced by an

amount equal to annual debt payments

Fiscal Effects:

Source: Colorado Legislative Council.

Table 3. Annual Estimated Tax Impacts Based on Current Borrowing

(Fully Implemented over 40 Years)

 

Total OutstandingBorrowing(Excluding

Enterprises)Total Tax Reduction

Taxpayer Impact*

(Tax Reduction)State Government

$2.2 billion $0.2 billion $49

Local Governments

$24.8 billion $0.9 billion $225

Total $27.0 billion $1.1 billion $274*Based on a household earning $55,000 per year living in a $295,000 home.

Reduces vehicle specific ownership taxes “over four years to nominal amounts” ($2 new; $1 other)

Sets yearly registration/license/title charges at $10 per vehicle total

Phases in over four years a $10,000 vehicle sales price exemption

Eliminates taxes on vehicle rentals and leases

Lowers state income tax to 3.5% over 10 years (IF net income tax growth exceeds 6%)

Ends state and local taxes and charges (exc. 911) on telecommunication service customer accounts

Requires annual state audit -- costs to implement audits of local government to ensure compliance: ~$400,000± first year; $120.7 million annually at full implementation

Proposition 101 Provisions

Effects on Local Governments

Source: Colorado Legislative Council.

Table 3. Local Government Revenue Impact of Proposition 101

(Millions in Today's Dollars)Local Government Revenue Source

First Full Year Impact

Fully Implemented

Sales Tax Revenue* ($357) ($471)Specific Ownership Tax Revenue ($172) ($431)Transportation-Related Revenue ($99) ($99)911 Fees ($2) ($2)

Total** ($629) ($1,002)

* Due to data limitations, the sales tax impact excludes the revenue reduction from sales tax that would no longer apply to cable

and satellite television services. Thus, the revenue reduction will be larger.

** There are likely other revenue impacts to local governments that are not included due to data limitations. These impacts may

include a reduction in franchise fee revenues that some local governments apply to telecommunications bills. Other governments, such as public highway authorities, can charge additional vehicle registration fees. The revenue impact of reducing or eliminating any of these fees has not been estimated. However, the table reflects most of the revenue impact to local governments. Totals may not sum due to rounding.

Effects on Taxpayers

Source: Colorado Legislative Council.

Property Tax Differential

  Year 1

Full Implementati

on

Home Value$

295,000 $ 295,000 Property tax reduction (annual) $ 87 $ 376

Commercial Value

$ 1,100,00

0 $ 1,100,000 Property tax reduction (annual) $ 1,181 $ 5,106

Weld Re-4 Effects – Amend. 60 & Prop. 101 Effects of Amendment 60 & Proposition 101 on Current Fiscal Situation

Example Based On Current Current With Effects Year Operating Funds Statute of Amend. 60 Amendment 60:

Re-4 Property Tax Revenues $

16,800,000 $

8,400,000

State "Backfill"* NA

8,400,000

Total "Like" Revenue $

16,800,000 $

16,800,000

Proposition 101: Re-4 Specific Ownership Taxes, etc.

$ 1,700,500 $ 0^

State "Backfill"* NA 985,500

Total "Like" Revenue $

1,700,500 $ 985,500

*: Theoretical; assumes state has the funds to accomplish. ^: Insufficient information to calculate but revenue would be inconsequential.

Weld Re-4 Effects – Amend. 61 Impact if Amendment 61 was in Place for 2007 Bond Election and Current

Current If NOT

Qualified With Effects

  Statute as Fast

Growing of Amend. 61

Assessed Value $ 363,573,560

363,573,560

363,573,560

Bonding Rate* 25.0% 20.0% 10.0% Bonding (Debt) Capacity

90,893,390

72,714,712

36,357,356

Bond Amount 41,500,000

41,500,000

41,500,000

Pre-existing Debt 31,605,000

31,605,000

31,605,000

Remaining Debt Capacity

17,788,390

(390,288)

(36,747,644)

Current Assessed Value

$ 524,000,000

524,000,000

524,000,000

Current Outstanding Debt

$ 61,795,000

$ 61,795,000

$ 61,795,000

Current Net Debt Capacity

69,205,000

43,005,000

(9,395,000)

*: District qualified as fast growing so could bond to 25% of AV rather than 20%.

Questions?