Truth Watch: Property Tax Hike Proposal Vs. Keeping USOC

By Political Reporter Marshall Zelingerm.zelinger@krdo.comFollow me on Twitter at www.twitter.com/mzelinger

COLORADO SPRINGS – You ask, we answer. Why are Colorado Springs residents being asked to raise property taxes if the city is going to pay $50 million to keep the United States Olympic Committee in Colorado Springs? NEWSCHANNEL 13 highlighted the property tax hike proposal earlier this week. When you get your November ballot in the mail in early October, you’ll be asked to increase the city portion of your property tax over the next ten years.

For a home worth $100,000, your property tax would increase $79.60 by 2014. For a home worth $200,000, your property tax would increase $159.20 by 2014.

After that story, NEWSCHANNEL 13 started getting questions about the USOC deal in relation to the property tax hike proposal.

This is one comment posted on krdo.com:

“An olther (sic) rip off by the City Council. They gave USOC over 50 million dollars and now to make up for that screw up they want to raise property (sic) taxes.”

“We have heard that from other citizens. It’s unfortunate because I don’t think that they see the whole picture,” said Colorado Springs Chief Financial Officer Terri Velasquez.

Some of you have wondered if we would even be asked to increase our propety taxes if the USOC deal didn’t happen. The answer is yes.

To keep the USOC, Colorado Springs will end up paying $50 million over 30 years.

“By the USOC staying in Colorado Springs, in 2010 we have to come up with an additional $1.8 million,” said Velasquez.

That’s $1.8 million the city wouldn’t have to come up with if the USOC were to leave. But if the USOC were to leave, the city budget would take a hit in another way.

“If the USOC leaves, in 2010 it would be a loss to the city of $3.4 million,” said Velasquez.

Instead of finding $1.8 million to keep the USOC, the city would have to find up to $3.4 million to make up for lost revenue.

“It would be much more drastic. We would have to figure out a way to make up the shortfall for the USOC leaving, to the tune of about an additional $1.6 million.”

According to research presented to City Council prior to approving the USOC deal, the USOC provides Colorado Springs $3.4 million from sales tax, property tax and tourism each year.

Colorado Springs collects about $2.9 million each year in sales tax revenue from USOC employees and families. The city gets about $200,000 yearly from property tax paid by USOC employees. The city also collects $278,000 in tourism (lodging and auto rental tax). If the USOC were to leave, it’s projected much of that money would leave as well, meaning a bigger budget hole.

“Sales tax and tourism fund a lot of the services within the city. With the loss of the USOC, you would lose a lot of the tourism and sales tax base,” said Velasquez. “By the USOC going away, it would be a loss not only to revenue to the city, but to jobs throughout the community, and I think those jobs are what generate revenue back to the city that provide for services for citizens.”

There is an argument that had the USOC left, the land it occupies at Boulder and Union could be turned into residential, business and/or retail. Because of non-profit status of the USOC, the organization doesn’t pay property tax. Had the land been turned into a new development, the city would receive property tax it hadn’t otherwise.

“Even if it was rebuilt as say, apartment buildings, it would take a long time before we would actually see the type of revenue that we would lose as a result of the USOC leaving.”