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Posted on: April 14, 2022

County vs. Household Budgets: The Same Right?

Tracy Kraft-Tharp headshot with news image text

As commissioners we encourage citizens to contact us with their concerns and questions regarding the county. As we have been sharing with you, our businesses and community groups, Jefferson County is facing significant budget challenges. As a result, I recently received an email regarding our county budget and TABOR. It read:

I voted for TABOR in 1992 and it has been great. For government it is simple:
 Jefferson County revenue coming in = X;
 Jefferson County overall expenses = Y
 X must be greater than or equal to Y

It went on to say “every household and private business has to use the same formula.”

Seems like common sense, right? However, TABOR (Taxpayers Bill of Right) makes it a bit more complicated. 

Using the example above and applying TABOR, thereby limiting your household revenue, this is what would happen.  Your household budget would be capped at how much money you made in a year to cover your expenses, i.e., mortgage, auto, living expenses, etc. However, there is no control or cap in place for your living expenses, which as we all know, continue to increase due to various factors. So, if you try to work an extra job (i.e., additional income) to cover the increased costs, you would have to return that money. If your mom sends you a check for your birthday, you must return it. If you won the lottery, you must return it. When you get a raise, you’d have to say no. To cover the increases, but with a limited income, you will have to dig into your savings to pay your bills. Then every year, you’ll have to tap into your savings a bit more, eventually running out of savings. 

Due to TABOR, the county must return any revenue above the TABOR cap. In 2021, the county was $1.5 million over our cap. As a result, we issued 200,000 checks to county-owned property taxpayers averaging $7. Mine was $3.91. Historically to address the cap limit, we elected to reduce the mills to stay below the cap versus mailing checks. Using our example, this would be like you telling your boss to reduce your pay each year.

You may be asking - how does the TABOR cap get determined? TABOR is calculated by a complicated formula annually and whichever of the two is less, the county is required to use. They are:   

  1. A calculation which looks at actual state and local revenue received.
  2. A calculation that takes the Consumer Price Index (CPI) rate and the net difference of new construction and uses that percentage to grow last year’s revenue.  

During COVID, the economy and supply chain shut down, thereby reducing the actual revenue received. Instead of growing at the natural inflation rate of approximately 3% to keep up with costs, it dropped by $14.5 million. That means this gap is about $20 million of lost revenue that was needed to keep delivering the public services that the county is mandated to provide. 

As you can see, this isn’t a simple case of Xs and Ys. The county is required, by statute to return revenue exceeding our TABOR cap. As we continue to navigate our challenges, we encourage you to reach out, educate yourself and attend one of our many community meetings to stay engaged so we can determine how best to keep Jefferson County operating at the level we all expect and strive for day-to-day.

 Commissioner Kraft-Tharp can be reached at [email protected] or (303) 271-8511.

o learn more about the Jefferson County Commissioners, visit our website. The Board of County Commissioners’ public hearings are held on most Tuesdays at 8:00 a.m. and we invite you to join us for public comment. Click here for details.

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