Castle Rock – Douglas County keeps reeling in the tax riches like it’s the rollicking 1990s, besting its urban neighbors, as well as Colorado’s ski country and rural counties.
Next year, Douglas County bookkeepers expect double-digit increases in property and sales taxes, riding a 10-year wave of new residents, homes and businesses.
There’s no ebb in sight.
“We’re on a good path, both in new businesses and internal growth with existing businesses,” said Trish Layton, vice president of the Southeast Business Partnership, south metro’s chief economic development organization.
Other metro area counties are expecting slight to modest increases in tax income next year.
Only Adams County rivals Douglas for overall tax growth, with a predicted 11 percent jump in sales taxes and an 8 percent increase in income from property taxes for 2006. Arapahoe County expects a region-leading 13.2 percent increase in sales taxes, but only a 1.9 percent hike in property tax income.
Douglas County officials, meanwhile, project an 11.5 percent gain in sales taxes, and an 11.8 percent jump in property taxes, buoyed by a surge in affluent residents that has made the county No. 2 in the U.S. for median household income. Three of the county’s four municipalities – Lone Tree, Castle Rock and Parker – are enjoying similar growth.
Officials in growing counties are quick to point out that new tax riches come with a price: more roads, more schools, more law enforcement. Doug las County, for instance, plans to add more than 25 new employees next year, reserving $817,000 for economic development and $541,000 for addressing the county’s water needs.
“I view it as a gift that Douglas County doesn’t have to struggle with its budget the way other counties do,” said Douglas County Commissioner Steve Boand. “At the same time, it’s a burden to make sure you’re doing the right thing with the money, because we may not always be this fortunate.”
The problem of how to spend money would be a blessing to the state’s cash-strapped rural counties, said Larry Kallenberger, executive director of Colorado Counties Inc. “You may not like growth,” he said, “but it’s better than the alternative.”
Across the U.S., state and local tax revenue rose this year by an average of 7.2 percent through September, the largest increase for that period in 15 years, according to the Bureau of Economic Analysis.
Colorado’s 271 towns and cities, home to about 72 percent of the population and a vast majority of the state’s economic activity, have budgets that are mostly holding their own, said Sam Mamet, executive director of the Colorado Municipal League.
In 2006, most rural county governments face a drop in services and possibly staff following five years of drought, sagging agricultural prices and flat sales for farmland, Kallenberger said.
Rio Grande County in the San Luis Valley faces a $700,000 deficit in its $18 million budget for 2006. County administrator Suzanne Benton has predicted a huge layoff and deep cuts in county services without an economic turnaround in the next year.
Agriculture is the county’s only significant industry, so when farmers suffer, so does the tax base. “When a farmer doesn’t have any money, he doesn’t spend any money,” said Commission chairman Doug Davie.
Neighboring Saguache County already used its savings to keep its budget solvent. Last April, commissioners told department heads to cut spending at every opportunity. While the moves helped, department heads were told in October to cut even deeper to avoid layoffs.
“We’re projecting not to spend a dime more than we take in next year,” Commissioner Mike Spearman said. “We have no choice.”
Resort counties are bouncing back after the chill on travel and luxury following the Sept. 11, 2001, attacks and years of curtailed snow during the drought.
Last year, Summit County predicted flat sales-tax growth for 2005, but has enjoyed a whopping 17 percent jump. Pitkin County, home to Aspen, expects a conservative 3.5 percent jump in sales and property taxes next year, even though sales tax revenue was up 9 percent in 2005.
“Growth is always a situation of the haves and have-nots,” Kallenberger said. “When you don’t have growth, you’re going to be a have-not.”
Staff writer Joey Bunch can be reached at 303-820-1174 or jbunch@denverpost.com.
