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Mountain Counties: the rich get richer, the poor get poorer

Article by Allen Best

Economics – May 1998 – Colorado Central Magazine

FOR THE THIRD YEAR, Russell George’s plan to alleviate some of the disparities between the rich and poor counties has failed to make it through the Colorado House of Representatives –killed by a narrow vote in committee.

George, a Republican attorney from Rifle, represents Aspen and Glenwood Springs in the Colorado House of Representatives, as well as Meeker and Craig.

His Growth Revenue Sharing Bill proposed that $10 million of state funds be tagged this year for collaborative projects between the “have” and “have-not” counties. Ultimately, George hoped to get $100 million into the fund, but he figured he had to start out small.

As George sees it, it’s time to recognize the changed realities of the late twentieth century. “County lines are less and less significant when thinking about where people work and live,” George says, “although taxes are still based on old jurisdictional lines.”

However, George wasn’t so bold as to suggest that county boundaries be redrawn. He would probably agree with the adage that it’s easier to move a mountain than change a political boundary.

Instead, he asked the Legislature to let “have” and “have-not” counties collaboratively tap state funds for mutually beneficial projects.

George’s proposal would have allowed Summit County, for example, to team with Lake County to repair Leadville’s leaky school roofs.

Lake County is now definitely on the short end of the jurisdictional stick. Lake contributes $107.75 per person in sales tax to the state treasury, about a third of the state average. The property tax base shows similar disparity. In 1995, Lake County’s assessed valuation per capita was only $6,315. That compares with $32,098 for Summit County, $33,850 for Eagle County, and $67,089 in Pitkin County.

Until the Climax Molybdenum Co. ceased production, however, Lake County bested all others in property tax base per capita.

Yet even before Climax declined, plunging Leadville into a season of financial gloom, the county boundaries for the region sometimes begged common sense. In the good old days, a large number of Climax miners lived in Buena Vista and Salida. Their children attended schools in those towns.

Climax, though, paid its taxes for schools in Lake County. Back then, one of the easiest jobs in Leadville was being the school finance director.

Now more than half of Leadville’s working adults commute 45 minutes to an hour daily to the I-70 resort communities. Those resorts need Leadville workers, but Leadville just as desperately needs a commercial tax base to repair its aging schools. State government helps school districts pay school salaries and buy books, but it doesn’t offer help to mend roofs or construct new buildings. And Leadville voters, who already have among the highest property taxes in the state, have twice nixed raising property taxes for repairs.

According to George, his proposed legislation recognized that traditional boundaries don’t work in all social and economic situations. “The impacts cross those lines even when the revenues don’t.”

His plan also relied upon yet another inequity. Rich counties aren’t necessarily pleased with the present system either.

THE WEALTHY I-70 resort counties collect far more for the state treasury than they get in the way of services. Last year, for example, Pitkin County, the home of Aspen, led Colorado in sales tax collections per capita with $1,073 per capita going to the state treasury. That’s 335 percent of the state average. And in 1993, the latest year that figures were available, Pitkin County residents paid average per capita income taxes of $2,021; whereas the state average was $1,202.

What did Pitkin County get in return? Unique in Colorado, it got no state aid for operations. A 1995 study found the state provided $696 per capita in services to Pitkin County, compared with the state average of $1,654. Likewise, Eagle and Summit Counties also showed a disproportionate amount of money going into the state treasury as compared to money taken out.

Even so, those counties have lots of money. So why, some critics asked, can’t those rich counties just give the poorer counties money?

Probably for the same reason you don’t tell the federal government to use your tax return to buy down the federal debt — especially given the numbers game that shows wealthy resort counties already give more than they get.

George’s proposed legislation could have provided both an incentive and a mechanism to move funds from affluent resorts to the beleaguered communities that are currently struggling to provide adequate services to resort employees.

Despite the nature of his proposal, however, George believes that ultimately the more valiant effort will be to figure out how the resorts can provide more housing within the resort community for workers and their families. Without that sort of thinking, he says, the bedrooms will just keep getting farther and farther away.

With workers and their jobs in the same place, there would be less social segregation, not only of incomes but also of ethnic groups. There would also be less pollution caused by commuting, and communities would be more cohesive.

“Community is harder to have when you’re spread up and down the valley,” says George. “People in Silt don’t really feel part of Silt, because they’re working someplace else.”

However, because so many of those bedrooms are already so far away, George looks at various tax-sharing methods that recognize new economic units.

“Obliterate county lines, because they’re irrelevant,” he says. “And also obliterate city lines, because they’re irrelevant.” As George explains it, that approach could also curtail some of the intense rivalries that now occur among towns and counties in pursuit of shopping centers and the sales taxes they produce. If the money were dispersed, it wouldn’t matter so much precisely where the stores are built.

If George’s bill had been embraced, it may have meant that property taxes collected in Vail Village would someday pay for new school roofs in Leadville. But now it’s back to the drawing board, and it remains to be seen whether George will once again rework his ideas. He likely will have far more influence next year as speaker of the House. However, there may be other ways to skin a cat.

In the meantime, school roofs in Leadville continue to leak, and employee buses keep going farther down the road, ranging into counties that just don’t have the financial resources to serve so many workers.

Allen Best lives in Avon and is currently working on a history of Interstate 70.