Thursday, August 13, 2015

Suthers plays defense on tax hike

Posted By on Thu, Aug 13, 2015 at 4:37 PM

click to enlarge Mayor Suthers: City doesn't have $50M laying around. - FILE PHOTO
  • File photo
  • Mayor Suthers: City doesn't have $50M laying around.
There's no need for a tax increase to fix the crumbling roads in Colorado Springs, according to  Americans For Prosperity, the Koch brothers-funded ultra conservative activist group.

But Mayor John Suthers begs to differ and spent some time this afternoon talking to reporters to explain his position. Suthers is proposing voters approve a .62 of a percent increase in the city's sales tax for five years, which would generate about $50 million per year that would be socked into street upgrades exclusively. Voters will have their say at the Nov. 3 election.

First, the AFP news release:
Assuming that a tax increase is the best way to pay for local infrastructure repairs, on Tuesday the Colorado Springs City Council voted 8-1 to put a measure on the ballot to increase the city sales tax. According to Steven Anderson CPA, who was contracted by Americans for Prosperity (AFP) Colorado to audit the City's budget, more than enough money is available to cover improvements.

Mayor John Suthers, the Colorado Springs City Council, members of the media, and citizens are invited on Friday, August 14th at 10:30 AM to meet in the Pikes Peak Room at City Hall for the presentation of Steven Anderson’s documented findings, immediately followed by a press conference on the steps of City Hall. The gathering is being hosted by AFP Colorado.

Anderson asserts, “A review reveals that there is more than enough money available to cover the cost of fixing infrastructure issues, leaving more money in the pockets of citizens, including those who would be hit the hardest by a sales tax increase.”

Anderson’s documented findings include city government’s clear option to cover their expenses if its leaders:
Recover $20+ million in property taxes lost by granting exclusions
Repurpose $8+ million in expiring bond payments for SCIP to infrastructure
Repurpose the Government Financial Officers Association (GFOA) recommended increase in ending balance of $20+ million to critical infrastructure issues.
Insist the City receive its fair share in tax revenue from the Pikes Peak Regional Transit Authority (PPRTA) by holding them to their agreement to distribute funding based on population resulting in an increase in capital available for infrastructure projects from $3.4 million to $10 million a year.
Fund $10+ million on a yearly basis from broadening the property tax base, cost savings and restructuring opportunities available to the City.
End the policy of special favors and giveaways to special interests like the Walmart in Fountain, University development, Business Improvement Districts and various Economic Development agreements.
Michael Fields, Americans for Prosperity-Colorado State Director brought in Anderson to conduct the review of the city budget. Fields explains, “We are committed to holding elected officials accountable and revealing how to use citizen’s tax dollars more effectively, rather than automatically asking for more.”

Steven Anderson’s research was based on the audited financials from the Colorado Springs 2014 Consolidated Annual Report along with documents including minutes, financial documents and other sources pertaining to the City’s operations.

Steven Jay Anderson CPA is a managing partner at Anderson, Reichert & Anderson CPAs PLLC in Edmond, Oklahoma and was appointed by Governor Frank Keating to fix federal and state issues with Pensions and Medicaid. He served as as Kansas’ Budget Director under Governor Sam Brownback turning a negative balance of $27.4 million that the state inherited from former Governor of Kansas, and recent US Secretary of Health and Human Services Director Kathleen Sebelius, into a surplus of over $700 million before returning to private practice. The innovative accounting management information system Anderson developed was called “revolutionary” by Forbes Magazine.
Please note that Steven Jay Anderson with AFP touts that he worked under Kansas Gov. Sam Brownback, which seems like an odd thing to boast about, considering that Brownback's fiscal policies have driven the state into such a huge deficit that the Sunflower State has become the laughing stock of the nation. 

But now to Suthers.

Calling the AFP's contentions "very uninformed" and "bizarre," Suthers says much of what the AFP contends is indecipherable in terms of what they're talking about. For example, AFP recommends the city "recover $20+ million in property taxes lost by granting exclusions."

"I think they're talking about exemptions," Suthers says, meaning nonprofits, churches, government agencies and the military. "If we as a city made the decision to do so [collect property taxes from those entities] we would be the only entity in the state of Colorado doing that. I don't think for a second people would want to tax churches." Suthers notes such a change would require a vote of the people.

But let's assume for a moment voters said yes. The additional tax, according to Suthers, would add $4.3 million to city coffers, not more than $20 million. In fact, he notes, the city's entire property tax revenue per year is less than $20 million.

Another example: AFP wants the city to insist on a greater share of the Pikes Peak Rural Transportation Authority (PPRTA) money, which comes from a 1-percent sales tax in the region. But Suthers notes the distribution, based on population of each entity involved, was approved by voters, so it's not likely a change would be forthcoming anytime soon.

We could bore you with more of Suthers' commentary, which was specific in addressing each point, but why? 

Suthers says he's scrubbed the budget for any stray pennies and $50 million a year just ain't there.

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