2004 CO Senate Debate on Tax-Rate Freeze
Dick Wadhams’ has proven himself to be a master at yucky campaigning. But Wadhams’ dream to be the next Karl Rove took a hit when the word “Maccaca” came out of the mouth of Virginia U.S, Senate candidate George Allen. Wadhams was Allen’s campaign manager, and Allen lost his Senate bid, thanks in part to his Maccaca line.
After the 2006 election, Wadhams came back to Colorado, where he became Chair of the State Republican Party. He’s been looking for slime to throw at Colorado Democrats. It seems that he believes he’s found some really good slime to nail them with.
He’s trying to use the Democrats’ efforts to clean up the state’s school finance mess against them in the next election. The Dems passed a law, signed by Gov. Bill Ritter on May 9, 2007, that freezes planned reductions in most property taxes statewide. If property taxes would have been reduced as planned, the state would have been forced by law (Amendment 23) to continue increasing funds for K-12 school funding, even though less and less money would have been collected from property taxes to pay for this. (The state school fund was projected to face a $100 million deficit by 2012.)
As a result, a larger and larger portion of K-12 school funding would have come from other state funds, depleting funding for other budget priorities, like higher education, healthcare, and more. Democrats have fixed this mess, for now, by freezing most property tax rates. But the Independence Institute says it will sue to stop the freeze, claiming that it must be approved by voters because it’s a tax increase. Dems counter that voters have already approved it. Now back to Wadhams. He’s licking his chops, according to a Rocky headline, because he’s planning to accuse the Dems in the next election of increasing taxes based on their support for the tax-rate freeze. Gov. Bill Ritter responded this way to the political heat. Denver’s news media has downplayed the fact that, in 2004, the Republican-controlled Senate approved the tax-rate freeze.
The Post reported that four current members of the Colorado Senate voted against the tax rate freeze this year, but voted for it in 2004. However, these Senators were not interviewed to explain their flip flop. Instead, the Post interviewed Sen. Andy McElhany, who explained the flip flop of his four Republican colleagues by saying that they were, at worst, confused. McElhany opposed the measure both in 2004 and this year.
Outside the Legislature, some high-profile Republicans support the tax-rate freeze. There’s this support, too.
The News reported that former Sen. Norma Anderson was the Senate Republican who pushed the tax-rate freeze in 2004. Rep. Keith King was “instrumental,” according to the News, in removing the tax-rate freeze from the bill.
John Andrews was Senate President in 2004. He also voted for the tax-rate freeze in 2004. A Post editorial highlighted his flip flop. Today, Andrews blames Anderson for using “sleight of hand” to push the tax-rate freeze through the Senate. Andrews says that, thanks to Anderson, he cast an ill-informed vote for the freeze. This was reported here and here.
Anderson, who’s no longer in the Senate, told me that, in her experience, legislators pay attention when property taxes are under consideration by the Legislature.
And there’s evidence that, in fact, Senate Republicans were paying attention to the tax-rate freeze in 2004, despite Andrew’s claim that Anderson duped the Republicans.
The tax rate freeze was the subject of a raucous debate on April 7, 2004, in the Senate chamber featuring Sens. McElhany, Anderson, Ron Tupa, and Ron Teck.
Here’s the transcript:
April 7, 2004
9:15 amColorado SenatePresent …• 33Absent/Excused …• 2; Gordon, VeigaSenator Taylor is acting as Chairman. Sen. McElhany: Thank you, Mister Chairman. Yes, I would ask for a no vote on severed section 2. What’s happening here is that, and what you don’t have benefit of is the fiscal note from the Appropriations Committee [“They have it” is heard in background] Is it in this- It shows that the effect of this part of the amendment has the effect of freezing the mill levy where it is right now on property tax assessments across the state. And when-. What happens when that mill levy freezes then as -. The way it works now, as these assessments go up, in order to stay within the Constitutional limits, as assessments go up, the mill levy drops. And if you adopt this portion, it freezes the mill levy. And when you freeze the mill levy, then, if you look at your fiscal note, what that does it will cost property tax payers an additional $18 million dollars the first year. And then, after that, as property values increase that becomes more and more dramatic, amounting to potentially hundreds of millions of dollars over a five- to ten-year period.Sen. Anderson is saying that this is not an increase. It’s just eliminating a decrease. And it depends on the property tax classification and the property tax jurisdiction and what’s happening with the value of your own property, depending on what happens.
But if you freeze this, what it does is it saves the state money at the expense of people paying property taxes. Now that’s pure and simple. So that’s what you’re voting on if you vote in favor of this, and I’d ask for a no vote.
Chairman: Somehow, something tells me, Sen. Anderson has a different discussion on this.
Sen. Anderson: Sen. McElhany, you don’t understand it at all because you weren’t here in …94 when we put this in the statute. What we put in the statute, and one of the big reasons-. There’s two reasons that we’ve transferred costs from local government to the state, from the school district to the state. There’s two reasons. One is Gallaghar, which you love to talk about assessements, and that’s wonderful, and this has absolutely nothing to do with it, absolutely nothing. The other is, we put in 94 a constant reduction of mill levy into the statute, and if you stop reducing the mill levy, you stop shifting the cost of school finance to the state. So what we’ve done over the years, we’ve gone from 40 percent of funding from the state to 62 percent. And what I’m trying to do is stop at the 60 or 62 percent, thank you very much. And stop dropping that mill levy when it should be paid at the local level where they have the schools.
Sen. McElhany: Sen. Anderson, I think we agree on one thing. And what this amendment would do is it stops the mill levy from dropping. Then, as property values go up, you’re gonna pay more in taxes because your mill levy doesn’t drop any more.
Sen. Anderson: You’re going to pay more in taxes when the value goes up anyhow, whether this is here or not, Representative McElhany.
Chairman: (Corrects Sen. Anderson’s use of the word “Representative”) Senator McElhany.
(background laughing and “woooo.”)
Sen. McElhany: (laughing) Thank you, Representative Anderson.
(laughing in background)
Chairman: You’re both out of order. Sen. McEhlhany. [Because they referred to each other as “Representative,” not “Senator.”]
(more laughing in background)
Sen. McElhany: (laughing) I would just ask for a no vote.
(More laughter)
Sen. Ron Tupa: Thank you, Mr. Chairman, Sen. McElhany. That’s vintage dragon lady from the House, as you well know. I was going to ask, how does your back side feel?
Thank you, Mr. Chairman, I’m glad someone else is taking some heat from Sen. Anderson. It’s not just me. But on this one, Sen. McElhany, Sen. Anderson is correct. I think what she’s trying to do is stop that perpetual shifting of costs from the local share of school finance to the state share. And what she’s saying is it’s inherently inequitable what’s continuing to happen, that the entire state is paying more and more and the locals are paying less and less. And Sen. Anderson, I think, is trying to slow if not stop that from occurring. And so somebody’s going to end up paying for school finance. What you’re saying is that is should be and it’s appropriate for the state to pick up more of the tab. And what I think what a lot of us feel is it’s actually more appropriate for the locals to pay more of their costs to get their kids through school. So, I will be supporting the Anderson, I think it’s the Committee report on this. You’re asking for a no vote and I will be asking for a yes vote on that section that you’re striking.
Sen. Anderson: And Sen. McElhany, I apologize. I got carried away. I remember you in the House. We debated there.
Sen. McElhany: Thank you Senator Anderson. Apology is not necessary. I just enjoy re-living some of these experiences, although it would be just as enjoyable not reliving them. And anyway, I would say the shift from the local level to the state level is for all kinds of different reasons. The fact that the state has partly chosen and partly been forced to fund schools at a higher and higher level, whereas the local jurisdictions and school districts have been inhibited for a whole lot of different reasons from doing that, one reason being that at some point we take their property tax away from them and equalize it across the state. But that goes on and on, and what this simply does is the local property tax payer is going to end up paying more money if you vote for this part of the amendment, and I’d ask for a no vote and we can move on.
Sen. Anderson. And I ask for a yes vote because what it does is stop the cost shift and it also does not increase. It stops the decrease.
Sen. Teck. Mr. Chairman, I was a little concerned I was stepping in between Senators McElhany and Anderson there. I was afraid I might get hit. I just wanted to add my support to Sen. Anderson on this and ask for an aye vote on this issue.
Chairman: Further discussion on the severed section two. Seeing no further discussion. All those in favor say aye (ayes heard in background). Those opposed no. (one no heard in background.)
This debate ended in a voice vote, which is in accordance with the normal rules for a Second Reading.
In the end, the School Finance Bill (HB04-1397), which contained the tax-rate freeze amendment, passed the Senate by a recorded vote of 29-6, with overwhelming support from Republicans and Democrats. Andrews, as Senate President, voted for the bill. Those who voted against it were: Veiga, Tapia, McElhany, Lamborn, Grossman, Groff.
June 11th, 2007 at 1:35 pm
Andrews frequently relies on misinformation in his columns and on his radio program, and this instance appears to be no exception.
See numerous other documented examples here: http://colorado.mediamatters.org/issues_topics/people/johnandrews