Blue Ribbon Report

The Blue Ribbon Panel on Golden’s Economic Future has submitted its report on how to close the long term gap between the City’s anticipated income and expenses.  The report is short on specific numbers, but contains two enlightening graphs.  One graph compares revenues and expenses for current levels of service, and predicts a deficit that begins sometime in 2015 and eventually grows to about $4.5 million  per year in 2030.   The other graph shows that funds available for capital improvements, including implementation of adopted neighborhood plans, the Clear Creek Corridor Plan, the Parks and Recreation Master Plan, and a backlog of Parks and Recreation maintenance work, will fall short by about $67 million.   The rest of the report describes various assumptions, trends, qualifications and methods by which the gap between annual income and expenses and capital improvements and capital expenditures might be bridged.  In a nutshell, the report says 1) Golden is in good shape for the time being; 2) there is no looming fiscal crises, but 3) over the next few years the City will need more revenue, fewer “wants and needs,” or some combination of both.  Otherwise, it looks like Golden will fall short by $110 million, more or less.

What the report doesn’t discuss is how the different choices would  affect the typical household in Golden.  So, lest Golden’s future succumb to the national clamor over whether to tax less or provide more, let’s examine the problem from the selfish point of view of a typical Golden resident. pegs the average value of a house in Golden at $324,000.  In 2012, the property tax paid on that house for calendar year 2011 was  $2,202.68, not including insignificant amounts that some households may pay for flood control and rapid transit.   Golden’s share of the total tax bill was $318.25.   Yes, you read it right.  If you are a typical household in Golden, you had to pay $318.25 for streets, snow plows, parks, police protection, fire protection, city staff (the City Manager, public works staff, dog catcher, zoning staff, and on and on and on), and that intangible pride that we all take in saying, “I’m from Golden, where we have it all and want even more.”

Data on sales tax is  more difficult to come by.  In 2011, it accounted for about $10 million in revenue.  Services and many consumer items are exempt from the tax.  For the sake of argument, assume that each household in Golden buys $10,000 worth of taxable goods annually within city limits.  That’s a lot.  The 3% city tax on those goods would be $300.

Adding the property tax and sales tax together gives us $618.25 per household for all the services, amenities and shopping opportunities you enjoy today.  Now for the fun part.  A 50% increase in the property tax and a similar increase in the sales tax would bring in an extra $7.6 million a year.  That’s $136.8 million by 2030, enough to continue to have it all with $26 million to spare.  Fifty percent?  That’s huge.  No, it isn’t.  It’s $309.13.  That’s it — less than $26 per month to continue to have it all including that intangible pride thing, plus all the additional stuff that we don’t even have yet.  Divide that by the number of people in your household.  That’s a deal.  THAT’S A GREAT DEAL!

Or you could go to brunch every couple months instead, and  plow your own street, repair your own potholes, put out your own fires, bicycle in your backyard, and explain to visitors that Golden looks shabby because  . . . .  well, because taxes are evil.  Or are they always?

Still need convincing? Answer this question. Why is my house worth $100,000 more than the same house in Arvada or Lakewood? That’s right — it’s all those amenities.  Now, tell your City Councilor to protect your investment.

(Note: The numbers here were taken from readily available sources, and should be considered approximate at best. Furthermore, because of Colorado’s Gallagher Amendment, property tax increases fall disproportionately on commercial property owners.  If one chose to mitigate the effect on commercial property owners by some mechanism to circumvent the Gallagher Amendment, it would be necessary to decide who should bear the expense of that subsidy. For instance, if a legal means were found to exempt commercial property from a tax increase and instead impose the burden entirely on residential property owners, the total monthly tax burden for each typical household would be approximately $40 (16.50 per person) more instead of $26.)

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