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City eyes development, housing tax increases
Firm hired to study potential Boulder ballot questions
Photo by Cliff Grassmick
Jesus Zazueta, under contract with Boulder-based Coburn Development, checks the edges of his painting job on the top floor of the 1505 Pearl St. building on Wednesday.
Boulder voters could be asked to increase taxes on new development to help pay for the accompanying demand for city services that include police and fire protection, libraries, parks, transportation and affordable housing.
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The City Council late Tuesday authorized $137,000 from various departments to pay for a study into how much the city could -- and just how badly it needs to -- ask for an increase in both Boulder's development excise tax and the housing excise tax through a potential ballot question in November.
"To keep the level of service and still grow, there either has to be increased fees or decreased services," Deputy Mayor Crystal Gray said.
The development excise tax is a one-time tax paid on new development to cover its share of capital facilities needed for the increased city services that come with having a larger population.
The housing excise tax helps fund affordable housing programs.
Susan Richstone, a long-range planner for the city, said Boulder is close to reaching the maximum amount it can tax new construction and has to ask voters if it wants more.
The city's consulting firm, TischlerBise, has already projected -- based on city figures -- that between 2008 and 2030, Boulder's population will increase by 15,400 people and 7,600 homes. The number of workers within the city is expected to jump by nearly 20,000 over the same period.
Other estimates show the city, under current conditions, would be facing a budget shortfall of $90 million a year by 2030 and that additional tax revenue would be needed to maintain service levels.
The current development and housing taxes, according to the consultants, are not enough to cover even today's costs of expanding services.
"There is a substantial difference in the true cost of the capital facilities to serve new growth and the amount collected," a recent report produced by the firm said.
Now, city development taxes on new, detached homes are $5,580, while attached homes are assessed $3,592 and non-residential development is taxed at a rate of $2.48 per square foot. Additions on residential developments are not included in the tax, but that could change if the council decides to include it on a ballot proposal.
The housing tax is assessed at the rate of 22.5 cents per square foot for new and annexed homes, and 48 cents per square foot for new and expanded non-residential developments.
Boulder voters in 1997 defeated a proposal to increase the development tax but, the following year, approved an increase based on the rate of inflation. The rate has remained essentially the same since 1999 despite the consulting company's 1996 recommendation that the city should as much as triple the current rates.
Sarah Huntley, spokeswoman for the Boulder Police Department, said the agency is among many city services that would benefit from such an increase.
"In order to keep up with the increasing call loads, we do foresee the need to get more revenue," Huntley said. "We expect that the public will continue to have growing demands of the police department."
A development excise tax, Huntley said, would be used to buy new facilities, maintain its patrol fleet, pay for rising fuel costs and provide for other infrastructure needs.
Huntley said police have seen a 6 percent increase in call volume in the past four years, and that the department foresees needing 18 additional officers -- and related equipment for them to use -- within about a decade.
"We want to be able to keep up with the community's expectations for quality police services," she said.
John Koval, director of development for Boulder-based Coburn Development, said increasing development taxes would directly affect his business.
"If council is looking at increasing those items, I think we need to have a wider discussion and evaluate how these costs have been applied in the past and how they will be applied in the future," he said.
Boulder City Manager Frank Bruno warned the council Tuesday night to consider the political realities of asking voters to approve new taxes.
"To what extent are the voters willing to go to fund development?" Bruno asked the council. "How far will they go?"
City Councilman Ken Wilson said he'll wait for the results of the study and consider how many other ballot issues voters might be asked to approve before deciding whether to add the excise-tax issue.
"We don't want to overload voters with too many ballot issues," Wilson said.
Excise taxes
What are they?
The Boulder development and housing excise taxes are one-time taxes paid on new development to cover the costs of capital facilities needed for the increased city services that come with an increasing population, and to support affordable housing programs. Boulder also has an education excise tax that pays for public education facilities and services.
How much are they?
Development excise taxes:
$5,580 -- New detached residential units
$3,592 -- New attached residential units
$2.48 -- The per-square-foot rate for new non-residential development
Boulder voters in 1997 defeated a proposal to increase the development tax, but in 1998 approved an increase based on the rate of inflation.
$1.58 million -- Total amount that development excise tax contributes annually to the city budget.
Housing excise taxes:
22.5 cents -- The per-square-foot rate for new and annexed residential units
48 cents -- The per-square-foot rate for new and expanded non-residential developments
What does it take to change them?
Additions to the Boulder tax code must be approved by voters. The City Council has approved beginning a study about how much additional tax would be needed to cover facilities to serve an expanding population. The council will discuss options for including tax measures on the November ballot when the study is complete sometime in mid-July.
Posted by aprilsmile on May 22, 2008 at 4:23 a.m. (Suggest removal)
how about we don't give any more variances. that will prevent the developers from jamming condos and other buildings into existing space (suppposed high density), we won't get the additional 15k people they say we are going to get because there won't be anywhere for them to live, we won't need additional services since we don't have the additional people and thus there will be no need for new taxes. how's that for a solution.
Posted by aprilsmile on May 22, 2008 at 4:26 a.m. (Suggest removal)
oh, by the way, thanks ken for not wanting to overload us with too many ballot issues. how about not worrying about the ballot issues and not overloading us with too many taxes? think that might be possible, ken?
Posted by malohovno on May 22, 2008 at 6:21 a.m. (Suggest removal)
more affordable housing is on its way. the city need do nothing.
Posted by runcatalina on May 22, 2008 at 7:05 a.m. (Suggest removal)
Developer fees are a short-term budget assistance program that tax current non-residents. Lyons, CO will soon be having some serious budget issues due to the town being built out. The developer fees that had been funding the city budget will be coming to an end. The town now needs to figure out where to get $$. I'm sure other towns across the front range will be facing similar issues.
Posted by MicMacGirl on May 22, 2008 at 7:11 a.m. (Suggest removal)
Don't feed wild animals....they just keep coming back for more.
Posted by trappist99 on May 22, 2008 at 7:35 a.m. (Suggest removal)
Best way to raise money with minimal impact to the town is a tax on realtors. They take their 5-6% weather the is 100K or 1M. Taxing them would keep the income in line with rising/falling house prices, they would still make a profit and the market would be unaffected.
Posted by nuggethillrd on May 22, 2008 at 8:07 a.m. (Suggest removal)
How about if the city start end your stupid spending when you get low on funds. We don't need new taxes we need a city that knows when enough is enough. Take that prairie dog money and use it to fund low-income housing.
Posted by phoenix_rises on May 22, 2008 at 8:17 a.m. (Suggest removal)
Dear City.......lay-offs!
Sign, Private-Sector
Posted by BlindLemonFishStix on May 22, 2008 at 8:41 a.m. (Suggest removal)
Send some of those cops over to Martin Acres if you see them doing nothing. They could write a million parking tickets and make the city all sorts of cash. But nooooooo, writing simple parking tickets is beneath them.
No...New...Taxes! How many times do we need to tell you? Use what you have. If it isn't enough you are doing it wrong.
Posted by boardman on May 22, 2008 at 8:45 a.m. (Suggest removal)
'"To keep the level of service and still grow, there either has to be increased fees or decreased services," Deputy Mayor Crystal Gray said.'
This quote shows the real trouble we are in. Our Deputy Mayor (intentionally?) is confusing "increased fees" with "increased rates". If there is more development and more activity, then the EXISTING tax rates would raise just the right amount of money to handle existing services, no? More activity will automagically make increased fee collection.
Instead she has confabulated a truth, that the city is growing, with a falsehood, that we need to raise tax rates.
If that is our Deputy Mayor, hurry next election. Either she knows what a line of BS that is and thinks we are simpletons, or (worse?) she doesn't even understand how stupid that logic is.
Posted by JakPott on May 22, 2008 at 8:48 a.m. (Suggest removal)
or, dont add the few thousand new homes at transit village...we need commercial space too.
The answer is simple. Vote no on new taxes.
Cut other non-essential services. Why is fire and police always used to peddle more taxes ? Imagine if they said..." if we cant get higher revenue, planning staff will have to be cut "
Posted by lissmth on May 22, 2008 at 9:01 a.m. (Suggest removal)
The Boulder Democrat Machine is alive and well. Why do you libs keep electing them?
Posted by ktr-dailycamera on May 22, 2008 at 9:48 a.m. (Suggest removal)
1. The development and housing taxes are one-time fees. Yet many of the uses cited for this money (adding extra police, maintaining vehicle fleets, etc.) are continuing charges that require steady sources of income. These are not the one-time added capital costs for which the article says these taxes were designed. City costs that require a steady stream of funds should come from taxes that provide a steady stream of income, such as the sales tax. But then, previous city policies have driven many retail interests out of the city...
2. The article was unclear, when the development tax was adjusted for inflation in 1998 was that a one-time adjustment or an annual adjustment for inflation? If the tax is truly being used solely for one-time added capital costs, an annual adjustment for inflation would be justified and in my opinion a ballot issue to allow for an annual adjustment for inflation should be presented to the voters. After all, that's the spirit of TABOR.
If, however, the development tax is already annually indexed for inflation then when this tax was first set up, why wasn't it set at an amount to support the city's added capital costs for the extra development? Are government costs are increasing at a rate higher than inflation? Supposedly Coloradans' income has only been growing at the rate of inflation for the past few years. Why should the taxpayers support a government which is growing at a rate faster than their own income?
3. I vaguely remember from all the anti-growth discussions in the late '90s that Boulder's population would be permanently limited to around 100,000 (about where it is today) by limiting development. As I recall, a 15% growth in the next 20 years was the worst-case scenario from which our leaders were supposed to "save" us. Is this a sign that maybe despite the best efforts of Boulder's leaders back then to create an Utopia we really can't control every aspect of Boulder's long-term development?
What's even more interesting is that TischlerBise's figures project an average of about 2 persons living in each new house. The anti-growth laws and regulations of the late '90s were supposed to force a much higher density than that. People were supposed to be able to walk to work and shopping. Maybe there's a lesson here for current city leaders in that trying to micro-manage everybody's lives to fit a small elite group's ideals of a "perfect" community is doomed to failure...
4. If there are only going to be about 2 people per new house, that suggests that maybe when space is added to existing housing it's often not being added for more people, but simply things such as home offices or home theaters. These uses don't require more police, more schools, or more libraries. At the margin they might require more fire department services, but maybe not. So before we start charging a development tax on home additions, maybe we should look at the uses of these home additions.
Posted by tastyguitardewey2 on May 22, 2008 at 9:52 a.m. (Suggest removal)
The per capita cost for infrastructure actually goes down at higher densities: less sprawl is less street paving, less water and sewer pipe, less land wasted. We wouldn't be building suburban schools while we close down Washington an Mapleton. Also, the impact in terms of environmental degradation per capita decreases as less need to use a car for every errand.
If the City needs more money which, despite Crystal Grey's claim, remains to be shown, the new infill projects should not bear the entire burden. However, the political reality is that most of Boulder lives in low density tracts and would be hard pressed to pony up the actual cost of that inefficient choice.
Posted by spud on May 22, 2008 at 10:07 a.m. (Suggest removal)
Dems have never seen a TAX they didn't love!
Posted by sojourner on May 22, 2008 at 10:22 a.m. (Suggest removal)
I find it interesting that just last week, City Council was wringing its hands because retail receipts are down and this week they are ready to slap a higher tax on one of the things that has worked for them: real estate development. (And, if I can throw a bone to vk, this has been the "pet project" of previous Council, no?!) One of the suggestions offered by Council was to raise taxes (go figure), but that would be "unpopular". This new option is a backhanded way of getting their money.
Previous posts hit it on the head: While the City has been driving out retail, development taxes have been funding ongoing expenses. Council needs to manage the budget better. They need to fund services from steady fees, not one-time fees. This would be RETAIL.
I vote for Costco, thank you.
No new taxes.
Posted by fbog on May 22, 2008 at 10:28 a.m. (Suggest removal)
aprilsmile,
I agree. We're full. No need for more growth except to enrich the developers.
Posted by fbog on May 22, 2008 at 10:34 a.m. (Suggest removal)
nuggethillrd,
"How about if the city start end your stupid spending when you get low on funds. We don't need new taxes we need a city that knows when enough is enough."
Here in SoBo they are unnecessarily redoing the median on Broadway and replacing sidewalk corners with pavers that look nice, until the weeds grow into the cracks. But they won't fix the potholes!
Posted by steve on May 22, 2008 at 11:09 a.m. (Suggest removal)
Let's decrease services by getting rid of Crystal Gray!!!!!!!!!!!!!!
Posted by SoBoPop on May 22, 2008 at 11:30 a.m. (Suggest removal)
Council and staff must think we citizens are all as stupid as we think they are.
Posted by KathrynK on May 22, 2008 at 11:43 a.m. (Suggest removal)
I love it! $137,000.00 to fund a study. Then add on the study concerning what to do with wild life that they enacted a few months ago. Study, study, study - money, money, money. They just need to open their eyes. There wouldn't be a problem if the past city council hadn't been in bed with the developers in the first place! This city has been ruined by the greedy and the selfish! Past city councils stood up to those who wanted to sell out Boulder - that is why it once was a great place to live and was on the list of best places. Now we are listed as one of the smartest cities - give me a break! The citizens have been fandoozled and fed a line of BS while we all know who has been profiting. All we are getting is more traffic, more headaches, less mountain views, more prairie dogs and less common sense.
Posted by frozen_mackerel on May 22, 2008 at 12:33 p.m. (Suggest removal)
"Council and staff must think we citizens are all as stupid as we think they are."
Well, not all of you.
Posted by brentw on May 22, 2008 at 12:44 p.m. (Suggest removal)
"The housing excise tax helps fund affordable housing programs."
Does anyone else see the irony in this statement? An excise tax on new housing will increase the cost of housing to consumers across the board - which will further squeeze the middle class out of town. When you factor in the price of land in Boulder, the exorbitant costs (time and money) for an unpredictable entitlement process, the cost of project financing, and the necessary return on the investment in order to justify the risks, the margins are not thick enough to absorb any additional excise taxes.
This is relevant to those of us in the private sector, because we are actually bound by our budgets.
The City of Boulder needs to get back to the basics of city government. Please spend my tax money on plowing the streets, police and fire/rescue services. This is what city governments were created for.
Posted by SoBoPop on May 22, 2008 at 12:58 p.m. (Suggest removal)
Cold Fish: do you have an opinion? Anyone can heckle from the sidelines (I looked up that spelling in the pictionary). You should not confuse poor spelling ability for stupidity. Even if that may be true in my case.
Anyhow, I for one am glad to see that you are still defending city council and the Boulder County Democratic Machine, regardless of your now split personality.
Posted by frozen_mackerel on May 22, 2008 at 1:17 p.m. (Suggest removal)
Whatever the Boulder Democrat Machine thinks is what I think*. Soon you will be helpless before the power of the BDM.
Already it is nearly too late. Get those recall petitions going.
__________________
*Unless I decide to think different.
Posted by Candidate_Coleman on May 22, 2008 at 2:07 p.m. (Suggest removal)
brentw The City of Boulder needs to get back to the basics of city government. Please spend my tax money on plowing the streets, police and fire/rescue services. This is what city governments were created for."
Here Here!
Your are also correct in questioning the logic of financing affordable housing at the expense of market based middle class housing, I campaigned on that issue. The theme of these posts have been 1. Fiscal constraint 2. Focus on reliable long term revenues (retail and commercial uses) as opposed to short term one time sources (DET's) and 3. Re-evaluate current city services and predilection to expensive studies.
3 solid points that I couldn't agree with more, and I also think it would be a political mistake to ask the voters for additional revenues after such a contentious year where council has spent all of it's political capital on a narrow and wholly unpopular agenda. The city organization must earn new revenue streams by doing an excellent job with the resources alloted to it. Practical people understand that whether its time or money, if it's available to be wasted, it will be wasted. Council and the City organization should focus on the practical matters stated above to regain the confidence of the people. Without confidence, the political capital required for emergency measures (which this is not) will not be available.
The solution to the city's impending revenue shortfalls is a balance of fiscal constraint, and economic growth, not ever increasing burdens financed by the lower economic classes.
-Shawn Coleman
Posted by starskyandgut on May 22, 2008 at 3:58 p.m. (Suggest removal)
And again witness the City Councils love of masturbatory studies to avoid enacting anything real. Yes, enact more taxes...place the burden on the people and not on the businesses/developers/architects/property management companies that are fleecing this town.
Rather than address Pop'n'scrapes, housing limits, and the rampant destruction of affordable housing here. Lets avoid making a real decision, form a committee, then fill it with development cronies to ensure that nothing substantial happens. That way another building season can progress unhampered, unregulated, and more millions can be for these monopolies. This effort is just another attempt by them to misdirect the real issue to something that would cause a knee-jerk reaction by the people. What? More taxes.....NOOOOOOOOO!
In a town with habitual budget shortfalls, why do they continue to fund ridiculous studies that have no merit and serve no purpose other than squandering city funds. How much was pissed away on that Prarie Dog debacle.....half a million...more? Maybe they should fund a study to analyze how much money is wasted on superfluous studies.
Posted by SoBoPop on May 22, 2008 at 4:58 p.m. (Suggest removal)
Shawn, while I don't agree with all your views, you do have your head screwed on right. It's too bad you didn't get elected, though you might be happy not to be associated with this bunch. I hope you try again.
Posted by theprairieprankster on May 22, 2008 at 5:14 p.m. (Suggest removal)
An employment privilege tax, aka a head tax, like we see in Denver may be a better and more equitable way to fleece...errr raise funds.
All employees who work in Boulder would pay $5 per month. That $5 would pay for roads and infrastructure. Many work in Boulder and will unlikely to be able housing close to work. Those 20,000 new jobs equate to $1.2 million dollars per year and that's on top of the existing jobs already here and ready to be taxed.
Posted by JakPott on May 22, 2008 at 9:32 p.m. (Suggest removal)
SoBo - good point.
" businesses/developers/architects/property management companies " are fleecing the town ? gimme a break.
without them, there would be NO town, unless of course your skill could actually provide something necessary to peoples lives...like shelter.
and, do tell, exactly how are they 'fleecing' you ?
Posted by JakPott on May 22, 2008 at 9:41 p.m. (Suggest removal)
If I made the tough choice years ago to forgo commuting to live and work in Boulder, I aint paying 5 bucks a month for myself....tell ya that right there.
A toll road on the road hits the users of the system - that is the fairest way to pay for roads...pay as you go, be rewarded if you dont...
As for fire and police...a population increase does not proportionally require more services - most of the capital equipment is paid for. To pay for the modest increase, the new residents should pay their own way (which existing excise taxes were suppose to do, why arent they working now ?)
We dont need prettier intersections or new programs (composting). We have plenty of parks, and more open space per capita than most towns. The housing department is huge, in their new brand new multimillion dollar digs in north boulder.
Enough already. Show some real courage, be an example to society and live within means.
NO to more taxes.
Posted by WhosYourDaddy on May 22, 2008 at 10:43 p.m. (Suggest removal)
Folks - It's very simple, don't buy anything in Boulder! Every penny you spend in Boulder just enables this kind of thinking.
Posted by frozen_mackerel on May 23, 2008 at 7:31 a.m. (Suggest removal)
Better yet, move to Longmont.
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