Business owners in Denver have had mixed reactions to Mayor Michael Hancock’s plan to keep a $68 million property-tax rebate usually returned under the Taxpayer’s Bill of Rights.
The initiative is awaiting City Council’s approval for the November ballot. The proposal also comes with a four-year moratorium on taxes typically levied on new-equipment purchases.
Ron Vaughn, co-owner of Argonaut Wine & Liquor on West Colfax Ave., said the impact of the rebate is usually minimal.
“It isn’t that huge,” Vaughn said. “In these times, we all have to pull together. It’s already been taken out, so I’m personally OK with it.”
The mayor’s plan seems like a reasonable way to deal with the city’s budget shortfall, he said. The city’s budget gap is estimated at about $90 million for 2013.
“I just hope we learned our lesson, and when the city has a surplus it’s more wisely spent,” Vaughn said.
But Christine Burtt, president of CQB & Associates, a public-relations and consulting firm in Denver, said now isn’t the time to hit businesses with this increased expense.
“Mayor Hancock’s referendum to keep tax money that is owed to businesses and individuals works against creating a robust environment for job growth,” Burtt said.
Burtt, the immediate past chairwoman of the Colorado Republican Business Coalition, said it’s better for Denver to limit spending to available income.
“There’s an upsurge in new small businesses being formed in Denver,” Burtt said. “Probably because many existing businesses aren’t hiring.”
Many businesses are still uncertain about the plan. The Denver Metro Chamber of Commerce said it is still researching the proposal and plans to take a position in August.
Property tax in Denver is split, with about 60 percent of revenue coming from business properties and 40 percent coming from residential properties, according to Denver County Assessor Paul Jacobs.
The rebate is usually distributed with the same ratio. The difference is a result of the Gallagher Amendment, which requires commercial property to be taxed at a higher rate.
Without the proposal, about $40.8 million of the $68 million would be refunded to commercial- property owners.
Under the proposal, for example, a residential owner would lose out on $111 for a $225,000 home.
The revenue kept by the city would be used to restore city services cut during the budget crisis, according to the mayor’s office.
City legislative director Skye Stuart said Aug. 13 is the earliest the City Council could vote to approve the measure for the November ballot.
Kevin C Keller: 303-954-5224, kkeller@denverpost.com or twitter.com/kevinckellerbiz
