The Parker Town Council threw its collective support behind what would be a “significant” development excise tax increase, according to town officials, if approved by voters Nov. 5. Council voted …
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The Parker Town Council threw its collective support behind what would be a “significant” development excise tax increase, according to town officials, if approved by voters Nov. 5. Council voted unanimously for a resolution supporting the excise tax initiative at its Sept. 16 meeting.
The tax would be imposed on residential developers who could transmit the tax onto a home price. The new excise tax would not affect current homeowners. The excise tax fund provides a revenue stream for capital projects related to growth, such as streets, parks and recreation, law enforcement and public safety service and administrative facilities for the town.
“This is truly when a tax isn’t a tax,” said Councilmember Jeff Toborg. “This makes growth pay for itself in the residential area while attracting much-needed commercial growth so the town, which is reliant on sales tax revenue, can be improved.”
If Parker voters approve the amended residential development excise tax, that would, in turn, end a two-year lawsuit between the town’s urban renewal authority and South Metro Fire Rescue. The original excise tax was written in 1999, and council said it did not keep up with the Construction Cost Index since then. The excise tax put in place in 1999 increases each year consistent with inflation.
The town responded via email to questions from Colorado Community Media about the need for a new excise tax:
“Parker is experiencing significant issues related to growth in residential development,” wrote Dannette Robberson, assistant to the town manager, “creating an immediate need for an increase to the excise tax. The referendum would increase the current excise tax rate paid by developers and builders to a level that is more appropriate to cover their share of residential growth and development. This would relieve some of the burden from the general fund, thereby reducing the likelihood that Town services would be reduced or eliminated.”
The Town of Parker and Partnering for Parker’s Progress, among others, reached an agreement with South Metro Fire Rescue in July to include an amended excise tax referemdum — the one council supports — on the November ballot that would, if passed, go partially toward South Metro’s future services as the town grows.
The agreement was made as part of a settlement in a lawsuit South Metro had filed two years ago against the town, alleging the town’s urban renewal authority, Parker Authority for Reinvestment (which has since changed its name to Partnering for Parker’s Progress, or P3) had diverted funds that should have gone to the fire district to other redevelopment projects. South Metro had claimed PAR withheld $322,000 in property tax revenues that should have gone to South Metro — $16 million over the lifespan of P3.
Town officials stated the excise tax referendum would have been proposed regardless of the South Metro Fire Rescue litigation and that the town had been conducting its own impact fee study prior to the lawsuit.
If the referendum passes, litigation between the two will end. If it fails, litigation will continue.
The new excise tax rates were determined following a year-long study conducted by TischlerBise, a firm specializing in fiscal sustainability for local governments. The rates were calculated through a review of the town’s existing and future financial position in relation to expenditure of public funds of new growth and development, according to Robberson.
If passed, the excise tax on new residential development would be as follows:
• Single-family: $10,178 (from $3,500)
• Attached dwelling: $6,337 (from $2,700)
• Dwelling unit within an apartment building: $5,567 (from $2,400)
The amount of the public safety service component to be paid to South Metro per housing unit, if passed, is as follows:
• Single-family dwelling: $583
• Attached dwelling: $376
• Dwelling unit within an apartment building: $338
The original excise tax in Parker was established following the 1999 election. At the time, the town was experiencing rapid growth, as it is now, and needed to help fund the facilities that come with that growth, according to the town’s municipal code. An excise tax was imposed on new residential development only. The new residential development excise tax is not contingent on the property’s value, but rather on the type of housing unit, like an apartment building and attached and detached housing.
“In my opinion," said Councilmember Joshua Rivero, "this is growth paying for growth."
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