Jefferson County wrestling with more budget cuts

Officials say TABOR and job market strains available money

Paul Albani-Burgio
palbaniburgio@coloradocommunitymedia.com
Posted 2/18/20

From the ongoing release of jail inmates following the closure of a floor of the county jail to a heated discussion about the future of the Jeffco fairgrounds, budget cuts and their fallout have been …

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Jefferson County wrestling with more budget cuts

Officials say TABOR and job market strains available money

Posted

From the ongoing release of jail inmates following the closure of a floor of the county jail to a heated discussion about the future of the Jeffco fairgrounds, budget cuts and their fallout have been front and center in Jeffco so far in 2020.

But the questions of what is behind — and what to do about — the cuts, which totaled $16.1 million last year and could add up to an additional $12 million in 2021, remains complicated and controversial.

MORE: Jefferson County city police chiefs call for more jail funding

County Commissioner Casey Tighe said the cuts come back to the Taxpayer’s Bill of Rights amendment, Colorado’s landmark 1992 law that limits taxes and government growth through a variety of provisions.

TABOR limits the amount of tax revenue a municipality can collect annually. That amount is only allowed to increase each year based on the rate of inflation and new construction growth. Last year, that increase came out to about 3.5%. But the cost of the services that the county funds went up by about 5%, Tighe said, creating a 1.5% shortfall.

“The reason why our costs are going up faster than TABOR is when you look at what our costs are, specifically payroll and human resources and health care, the cost of those things is going up faster than consumer goods,” Tighe said. “And with the lowest unemployment rate in the state we are having to pay competitive wages to pay good employees so we are falling behind the TABOR rate.”

The problem of the cost of wages increasing faster than the county’s TABOR wage limit is one that the county has faced for at least the last five years, Tighe said. However, in the past, it was able to make up the difference by dipping into reserves.

“That’s no longer an option because our rainy day fund is at its two month minimum,” said Commissioner Lesley Dahlkemper. “Currently our bond rating is AAA plus but if we start to dip into those reserves that bond rating diminishes and we don’t want that to happen because it has an impact on other budget related issues.”

In addition to limiting how much of the county’s tax revenue the county is able to keep, Jeffco County Manager Don Davis said the TABOR limit further hurts the county by limiting its ability to take in revenue from other sources, such as state government grants.

“There is actually no incentive for me to go after extra state dollars that are citizens have paid into because it overflows the TABOR cap teapot,” Davis said.

As a result, the county ends up funding projects out of its own limited budget that could otherwise be funded with state grant dollars.

Davis also said that the county’s primary source of revenue is property taxes and that its share of those taxes has actually decreased recently from 26% to 24%.

“A lot of folks are saying that property taxes continue to go up and that’s true but it’s not because the county is asking for that money it’s because the school system and those other organizations are asking for it,” said Davis.

Jeffco 1A could have prevented cuts

In anticipation of the coming budget cuts, the commissioners approved a ballot measure for last year’s ballot that would allow the county to opt out of the TABOR revenue limits to retain the additional $16.1 million in collected tax revenue necessary to avoid the budget cuts. Currently any money collected over the limit must be refunded to taxpayers.

However, voters defeated that measure 55% to 45%, leaving Jeffco as one of just two Colorado counties whose voters have not chosen to opt the county out of TABOR’s revenue limits.

Jeffco resident Mike Donahue, who helped lead the campaign against the failed ballot measure, said that vote made clear county residents do not want the county messing with TABOR and instead want to see the county tighten its belt by identifying possibilities for increased efficiency and prioritizing essential government services.

“I think they have an opportunity here to listen and find those efficiencies and opportunities,” Donahue said of the commissioners. “I believe they can do that.”

With the election now behind them, each of the commissioners also told Colorado Community Media that they will now focus their efforts on identifying more efficiency and listening to the voters about the services they most prioritize as they set about making next year’s cuts.

Commissioner Libby Szabo said the commissioners are also planning to meet with the heads of each of the county departments in April to identify potential savings within the departments and discuss how those departments can run more efficiently.

“This is making Jeffco really take a look at how are we doing business, how are we providing for the needs of our county and what are some things we are doing that other entities like nonprofits or the private sector could be doing while we focus on core functions,” Szabo said. “And I don’t think it’s a bad thing to have to take that dive. That’s actually what good government is supposed to do.”

But while the county knows more cuts will need to come this year unless the voters let the county go over the TABOR cap (which is something none of the commissioners said they are focused on), it remains to be seen whether the county can expect to have to continue making cuts to stay under the cap in the future.

“Right now we are going through the cuts and once you get the ongoing costs more in line with the revenue it becomes less of a problem going forward,” Tighe said. “But once we do that our service levels are going to have to go down whether it be waiting in line for different things or road maintenance or whatever it is.”

But that’s not the whole story, Tighe said.

“As long as that TABOR escalation formula is lower than what it costs for us to be competitive in providing services we are always going to fall behind a little more each year,” he said. “The unemployment situation might change years from now but under the current economy we are going to fall behind each year because the current formula doesn’t keep up with reality, in my opinion.”

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