Photo: Pagosa Springs City Hall.

Yesterday we published a well-written opinion piece by Daily Mail Columnist Hank Lydick discusses a controversy in the Pagosa Area Water and Sanitation District – the special district that provides drinking water to most of Archuleta County’s core communities and some of the outlying communities. One of those outlying communities is Elk Park.

As Mr Lydick points out, our governments have historically made arrangements to provide certain services to citizens and taxpayers, and there is an understandable expectation that those services will continue to be provided. However, the costs of providing those services can change. And I suppose we expect that as inflation increases, so will the costs of government.

The alternative to higher government costs seems to be “fewer services.”

However, the natural tendency of almost any organization is to try to get bigger and offer more. Is this what the taxpayers and voters of Pagosa Springs want? More services at ever-increasing costs?

When the Archuleta Board of County Commissioners placed Measure 1A on the November 2022 ballot, it promised better road maintenance and expansion of other services in exchange for a 37 percent increase in the county sales tax. The City Council supported this ballot measure, as did the Pagosa Springs Community Development Corporation.

But voters rejected the proposal by an overwhelming majority.

Two previous attempts by the county to raise sales taxes to pay for a new prison were also rejected.

When the San Juan Water Conservancy District requested a modest mill levy increase in 2018 to fund further work on a proposed water reservoir in the Dry Gulch Valley, voters said no by a 3-1 margin.

In contrast, recent tax increase proposals from the Pagosa Fire Protection District and the Archuleta School District were overwhelmingly approved by local voters. Tax increase proposals from the state-run Pagosa Springs Medical Center also received broad approval.

How does one explain why some tax increases are supported by voters and others are not? I have my suspicions, but they are just suspicions. It is common practice to conduct polls before an election, but almost never does a government try to find out why its tax measure failed. The explanation given by government leaders after a defeat is usually: “The voters didn’t get it. There was too much misinformation.”

Sometimes a local government district doesn’t even have to ask for more money. The city of Pagosa Springs, for example, has managed to continually expand its reach and services without charging higher taxes. (Fees have been raised regularly, though.) As far as I know, city government expansion over the past few decades has been almost exclusively in the area of ​​tourism services and recreation, funded by a mix of local sales and lodging taxes and grants.

The City of Pagosa Springs has a strangely privileged financial position in our community. In the 1990s, the City annexed nearly all of the commercially viable land west and east of downtown, which theoretically gave the City access to nearly all of the community’s sales tax revenue. But the City generously agreed to split the sales tax 50/50 with the county government.

From the city’s budget document for 2024:

For about a decade, the city has seen a steady increase in sales year after year.
Tax. A decade ago, the total sales tax for the city was $4.1 million. For 2024, the total sales tax is expected to
about $8.8 million, or more than double. While a decade is a significant period of time, it just goes to show that things are different for the city now.

We must point out that the town has a population of about 1,770, so sales tax revenue is about $4,970 per person.

The other half of the 2024 sales tax revenue goes to the county government. That’s about $8.8 million. More or less. Archuleta County has a population of about 14,400 residents. That’s about $610 in sales tax revenue per person.

That means the city government receives eight times as much sales tax per capita as the county. While this isn’t the whole picture of how the city and county are funded, it’s a big part of it.

You can also compare sales tax by service area. The city is responsible for maintaining about 3,200 acres of infrastructure and services. That equates to about $2,750 per acre in 2024.

The Archuleta County government is responsible for managing about 31% of the county, or about 271,000 acres. (The rest is under the control of the National Forest Service or the Southern Ute Tribe.) So the county’s sales tax revenue is about $32 per acre.

This means that the city’s sales tax revenue per acre is about 86 times the county’s revenue.

While this is not the entire revenue picture of the two governments, it helps explain why the City Council seems so hesitant and lax in its spending decisions, even compared to the BOCC. And perhaps also why the BOCC is much more deeply in debt than the city government.

In my experience, two of the seven City Council members – Mayor Shari Pierce and Councilman Leonard Martinez – are the most cautious with the city’s revenues and tend to vote “no” on proposals that some of us would consider “frivolous spending.” In other words, they are the fiscal conservatives on the council.

Next week, in part two, I will go into more detail about what I mean by “frivolous spending” by the City Council.

I suppose this is the natural consequence of a government having “too much money.”

Read part two on Monday…