The negative side effects of growth and whether growth pays for itself top this year s legislative agenda. These new concerns have crowded out earlier concerns about Colorado s revenue raising system yet both are inextricably linked. Smart growth calls for tax policies to ensure that growth pays for itself. It calls for tax policies that encourage the protection of open space and clean air while discouraging patterns that result in traffic congestion and sprawl.
Tax policy is about much more than how much is paid in taxes.
The kinds of taxes we use to raise a given level of revenue affect economic decisions in different ways. That s one of the reasons why Colorado, like many states, has relied on the three legged stool of income, sales, and property taxes to finance public activities. At the state level we rely heavily on income taxes and the state portion of sales tax. Cities, counties, and special districts rely on a mix of sales and property taxes. The property tax is the only direct source of revenue school districts, although most receive operating budget equalization dollars from the state.