$16 MILLION TAX EXEMPTION FOR CRONY-CONNECTED BUSINESS
Note: Sales tax still collected at register, but it goes to developer and business instead of the general fund to pay for police, firefighters, roads and parks.
In previous tax giveaways (http://www.informcos.com/cscctif.html ), the City at least made an ATTEMPT to connect Colorado Springs taxpayer giveaways to developers and "public benefit." In nearly every case, it’s a disgrace what supporters of Corporate welfare call “public improvements” (http://www.informcos.com/fallacy4.html) that are developer costs--costs that any non-favored developer must foot the bill for themselves. These deals are generally done through the use of “tax increment financing" (TIF), which presumes any growth (or ‘increment’) is caused by a new development without which--as argued by recipients of the corporate welfare--no growth would have been in any way possible. Absurd, of course, but at least they had some sense of shame in giving away taxes collected from John and Jenny Public to their favorite developers and businesses. In previous deals those “increment” dollars which have added up to hundreds of millions of dollars in taxpayer giveaways at least (if only for show) had to be laundered and the appropriations approved through a “City” agency, the Urban Renewal Authority.
A new chapter in Colorado Springs cronyism began on February 26, 2019. In the City government’s continued campaign to enrich Nor’wood Development Group via the use of taxpayer handouts, City Council voted on a new city law to simply EXEMPT a business from collecting a portion of taxes. That’s right, if you’re in the right “good-ole-boy” club, you can get the City to give YOUR business a free pass. There is no connection of the reduced tax burden whatsoever on even fake news “public improvements.” In fact, the new retail store will not only receive the special “friend-of-Nor’wood” deal to be exempted from 1% of City sales tax collection with no limitations on what the business can spend the money on, but the business will be charging shoppers an ADDITIONAL 2% sales tax for themselves and their favored developer, Nor’wood. These additional “Public Improvement Fees” or PIFs (ironically named) will be charged and half will go to the business and half will go to the developer to assist them with costs that any other developer and business who are not good friends with City government have to fund themselves. Note that while funding the business and the developer will be guaranteed from every ka-ching of the cash register, the City will not be funded—the business will be exempted from half its tax liability by City Council ordinance and agreement with the handpicked business. Projections anticipate $16 million forgone in City sales tax revenue. So much for the free market. The ordinance will pave the way for Council to hand out this special deal to any business they want with two simple majority votes with 24-hours notice to the public.
PRESUMABLY SINCE THE CITY HAS NO NEED TO COLLECT SALES TAX FROM THEIR BUSINESSES, THEY WON’T BE ASKING TO RE-UP THE .62-CENT “POTHOLE TAX,” RIGHT?
All indications are that Mayor Suthers and his Council are committed to asking for an extension of the $250 million sales tax increase for road repairs and repaving. The tax was passed in 2015 because the Mayor and Council convinced voters that there just wasn’t ENOUGH sales tax collections to maintain City roads. Despite the proclamation, during the time since the new tax was passed in 2015, well over $100,000,000 have been voted by City Council to be diverted from future sales tax revenues to assist well-connected developers.
The following Councilors voted for this deal:
Richard Skorman (rskorman@springsgov.com)
Merv Bennett (MBennett@springsgov.com)
David Geislinger (dgeislinger@springsgov.com)
Yolanda Avila (yavila@springsgov.com)
Tom Strand (tstrand@springsgov.com)
Jill Gaebler (jgaebler@springsgov.com)
Don Knight (dknight@springsgov.com)
A new chapter in Colorado Springs cronyism began on February 26, 2019. In the City government’s continued campaign to enrich Nor’wood Development Group via the use of taxpayer handouts, City Council voted on a new city law to simply EXEMPT a business from collecting a portion of taxes. That’s right, if you’re in the right “good-ole-boy” club, you can get the City to give YOUR business a free pass. There is no connection of the reduced tax burden whatsoever on even fake news “public improvements.” In fact, the new retail store will not only receive the special “friend-of-Nor’wood” deal to be exempted from 1% of City sales tax collection with no limitations on what the business can spend the money on, but the business will be charging shoppers an ADDITIONAL 2% sales tax for themselves and their favored developer, Nor’wood. These additional “Public Improvement Fees” or PIFs (ironically named) will be charged and half will go to the business and half will go to the developer to assist them with costs that any other developer and business who are not good friends with City government have to fund themselves. Note that while funding the business and the developer will be guaranteed from every ka-ching of the cash register, the City will not be funded—the business will be exempted from half its tax liability by City Council ordinance and agreement with the handpicked business. Projections anticipate $16 million forgone in City sales tax revenue. So much for the free market. The ordinance will pave the way for Council to hand out this special deal to any business they want with two simple majority votes with 24-hours notice to the public.
PRESUMABLY SINCE THE CITY HAS NO NEED TO COLLECT SALES TAX FROM THEIR BUSINESSES, THEY WON’T BE ASKING TO RE-UP THE .62-CENT “POTHOLE TAX,” RIGHT?
All indications are that Mayor Suthers and his Council are committed to asking for an extension of the $250 million sales tax increase for road repairs and repaving. The tax was passed in 2015 because the Mayor and Council convinced voters that there just wasn’t ENOUGH sales tax collections to maintain City roads. Despite the proclamation, during the time since the new tax was passed in 2015, well over $100,000,000 have been voted by City Council to be diverted from future sales tax revenues to assist well-connected developers.
The following Councilors voted for this deal:
Richard Skorman (rskorman@springsgov.com)
Merv Bennett (MBennett@springsgov.com)
David Geislinger (dgeislinger@springsgov.com)
Yolanda Avila (yavila@springsgov.com)
Tom Strand (tstrand@springsgov.com)
Jill Gaebler (jgaebler@springsgov.com)
Don Knight (dknight@springsgov.com)