Opinion ID: 1293270
Heading Depth: 1
Heading Rank: 4

Heading: Extraterritorial Impact

Text: The state argues that the home rule residency requirements have an adverse economic impact beyond the borders of the particular municipalities. The state claims, for example, that by requiring its employees to live in Denver, the city makes it more difficult for the surrounding communities to compete for property tax and sales tax revenues, arguing that for every economic gain caused by a person moving into Denver there is a corresponding loss of revenue in the municipality from which the person moved. The state offered evidence to the trial court that 70 percent of fire fighters and 66 percent of police officers hired since January 1, 1986 by the City of Denver lived outside the corporate limits of the city at the time they were hired. From this statistic, the state concludes that 60 percent to 70 percent of all Denver employees would live outside of Denver in the absence of the residency requirement. However, we are unpersuaded. The fact that a majority of persons hired were living outside of Denver before they were hired does not demonstrate that a significant number of them, by their own choice, would not have moved to Denver in order to be closer to their work. With respect to potential sales tax revenues, there is no evidence as to what extent Denver employees residing within the city limits of Denver spend dollars solely at commercial establishments in Denver rather than in the surrounding communities. Further, even if the state's assertions respecting the desired residency and the consumer spending of Denver employees were true, the state has not shown that such an impact is significant. To the contrary, Denver for its part presented evidence, which was not challenged by the state, that Denver employees comprise merely one-seventh of one percent of the total workforce in the state. In light of this fact, we conclude that the economic impact of the Denver residency requirement on the remainder of the state is de minimis. [7] We also find unconvincing the state's condemnation of interjurisdictional competition for tax money. Municipalities compete in numerous ways for tax dollars. For example, they may offer tax preferences to encourage industries to relocate to the municipalities. In a more general sense the development of recreational, educational, and cultural facilities also serves to attract businesses and residents. Thus, we are unpersuaded that the impact of the residency requirement on other communities is so significant as to make the residency of a home rule municipality's employees a matter of state concern.