Colorado River Water Conservation District now heading for 2020 tax ask
GLENWOOD SPRINGS — The directors of the Colorado River Water Conservation District supported a recommendation Tuesday from general manager Andy Mueller to research asking voters in November 2020 to restore a portion of the district’s original property-tax rate, or mill levy, and increase its annual revenue from $4 million to $8 million.
In February, the 15-member river district board was leaning toward asking voters this November to remove the revenue restrictions imposed upon it by the Gallagher Amendment, which was seen as easier to pass than a direct tax increase.
But now the residential taxing rates set by Gallagher appear to have stabilized, putting off a potential $370,000 hit to the river district’s budget for two years.
Plus, there may now be a competing water-funding question on the this year’s ballot. So the district is looking to 2020.
“It alleviates the immediate threat but not the long-term threat to the river district’s property tax-based revenues,” Mueller said of the Gallagher rate.
The district gets 97% of its revenue from property taxes on residential and commercial property, and the expected Gallagher rates would have cut the district’s revenue by 15%.
Mueller said it now makes more sense to ask for an increase in its mill levy from 0.252 mills to 0.5 mills — and possibly to ask voters to eliminate the revenue restrictions in the Taxpayer’s Bill of Rights, or TABOR, and include a sunset provision of 10 to 15 years.
If the board does nothing, Mueller said the combined effects of Gallagher, TABOR and a shrinking oil-and-gas sector in western Colorado will cause the district’s property revenue to be less than its expenses, even with more cuts of staff, expenses and the district’s water-project grant program.
“The board and staff are concerned that the perfect storm of negative economic events and constitutional amendments will create a situation where we will be unable to meet our mission,” Mueller said. “We’ve been granted a reprieve to think about it and figure it out, but we are really concerned about having adequate financing to meet our mission. Today, we do a very good job of providing technical advice, legal representation and advocacy, the part that has been left out is actual meaningful cash contributions to projects and efforts by our constituents.”
The river district board also got another reason to avoid this November’s ballot when a bill was introduced in the state Legislature Tuesday to ask voters this fall to approve legalized sports betting.
The betting bill is relevant to the river district because it calls for a 10% tax on the gambling revenue, which a 2017 study estimated could be as much as $300 million, and most of the money is to be used to pay for water projects and programs.
“We want to see what happens on that statewide question,” Mueller said in an interview. “Statewide tax measures are really difficult. We don’t want to: A) get in the way of it and contribute it to being defeated; and B) be defeated in its wake. We don’t want to be pulled down with it, if that happens. But either way, we support the effort.”
Mueller serves on an ad-hoc committee that has been exploring financial options for water projects and programs under the auspices of the state’s Interbasin Compact Committee.
“We’re not the architects of sports betting,” Mueller said of the committee.
The sports-betting bill, co-sponsored by state Sen. Kerry Donovan, says 10% of the tax revenue from gambling is “to fund implementation of the state water plan and other public purposes.”
The bill also includes language consistent with a demand-management — or water-use reduction — policy adopted in November by the Colorado Water Conservation Board, a state agency in the Department of Natural Resources.
For example, the bill says the money could be spent “to ensure compliance with interstate water allocation compacts” and on “projects and processes that may include compensation to water users for temporary and voluntary reduction in consumptive use.”
Mueller said even if the sports-betting bill passes, it might not meet the Western Slope’s water needs.
“We support a statewide effort, but we also understand the importance of doing things for ourselves on the Western Slope,” Mueller said. “And we understand that we can’t rely on others from the outside to do the things that we need to do to protect ourselves.”
Mueller cited examples of projects consistent with the district’s mission but short on funding, including building a bypass channel around Windy Gap Reservoir to add a more natural flow to the upper Colorado River.
He said building small, multipurpose reservoirs in the headwater counties could help provide water to ranchers, farmers and cities, as well as to downstream sections of rivers and streams stressed by climate change.
“Last year was a perfect example of where our reservoir releases were able to bring down the temperatures in the Fryingpan, Roaring Fork and upper Colorado rivers,” Mueller said, referring to releases from Ruedi Reservoir. “Before we started releasing water, all of those rivers were dangerously close to getting to a point where the fish were going to start massively dying.”
Mueller looked to the district’s history for his mill-levy recommendation, saying Western Slope residents in 1937 went to the state Legislature and asked that the river district be created with a mill levy of 2.5% so residents could manage, develop and protect the water supplies and preserve the high-quality trout fishing on the rivers.
“Even back then, they talked about protecting the rivers. It was then recreation in terms of fishing, but that’s what they were looking for,” Mueller said.
Mueller said Western Slope residents knew it would be an expensive venture, but they were willing to tax themselves at 2.5 mills.
“The values have all gone up, but it was the same impact proportionally on each property as 2.5 mills would be today, but we’re now at a tenth of that,” Mueller said.
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