Denver council sends measure to “de-Bruce” property taxes to voters
DENVER – Mayor Michael Hancock’s high-stakes effort to put the city on firmer financial footing is on its way to voters.
On Monday night, the city council voted 11-1 to send a measure to the November ballot that will ask voters to allow Denver to “de-Bruce” city property taxes, which would generate an estimated $68 million in annual revenue that is currently refunded to taxpayers.
Faced with a difficult choice, Hancock opted to risk alienating the city’s business community by pushing the de-Brucing measure, rather than pushing a fee for trash pickup proposal that was unpopular with voters or a special library district.
Now, it’ll be up to him to make the case.
“Nearly every other municipality and school district in Colorado has taken similar steps to help their local economies grow out of this recession and it is time Denver does the same,” Hancock said in a statement following the council’s vote.
“This proposal is part of a fair, balanced and reasonable approach to eliminate Denver’s budget gap and restore city services to our children, open libraries full-time, replace aging police and fire vehicles and repave streets that haven’t been resurfaced in two decades.”
Colorado’s Taxpayer’s Bill of Rights, or TABOR, imposes revenue limits on the property taxes that can be collected by municipalities and by the state. Those limits can only be removed by a public vote, a process that’s commonly known as “de-Brucing” in reference to Douglas Bruce, the author of TABOR.
In 2005, Denver voters approved removing TABOR revenue limits for 10 years on sales taxes but not property taxes, costing the city hundreds of millions in possible revenue over the past two decades.
That de-Brucing referendum expires in 2014.
This November, amidst a presidential election, Denver voters will decide whether or not to permanently de-Bruce sales taxes as well as extend it to property taxes — or, as Hancock noted in an interview with FOX31 Denver on Tuesday, to do what most other Colorado cities have already done.
“By no means do we want to overburden our taxpayers with high taxes,” Hancock told FOX31 Denver. “Denver will remain competitive when we eliminate this. We will still be able to attract businesses and residents to move here. Don’t forget, 232 out of 271 Colorado cities have already de-Bruced.”
For homeowners, approving the de-Brucing proposal would mean letting the city keep roughly $100 on a home valued in the $200,000 range.
But for businesses that own larger properties valued in the millions, the initiative comes at a greater cost.
The Denver Metro Chamber of Commerce isn’t taking a position on the proposal, and Hancock will meet with leaders at the Downtown Denver Partnership this Thursday to mollify its concerns about the disproportionate impact on large property owners.
While no individuals have come out publicly against Hancock’s initiative yet, many remain concerned about what de-Brucing will mean to the city’s largest businesses and want more details about how the additional revenue will be spent, according to sources who asked not to be identified.
“It’s a political risk for Hancock, on two levels,” said political analyst Eric Sondermann. “He’s a relatively new mayor still introducing himself to the city. If this isn’t successful, it will diminish his political capital and clout; and, even if it is, Hancock risks offending the business community or somehow establishing the business community as an adversary instead of an ally.
“That can be something that carries over to other issues, or to the next mayoral election, if the mayor isn’t careful.”