Colorado 2018 GASB-77 Data


How much revenue foregone on top of TABOR?

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GASB 77, or Statement No. 77 of the Generally Accepted Accounting Principles (GAAP) set forth by the Governmental Accounting Standards Board (GASB), requires governments to disclose the amount of foregone tax revenue due to tax abatement programs.

Updated: November 26, 2019

Colorado has the most restrictive tax and expenditure limit in the country, according to a ranking by this study. The Taxpayer Bill of Rights (TABOR) has severely restrained local revenue and led to many service cuts since it went into effect in 1992. Tax breaks on top of depressed revenue streams can be extra costly. This snapshot takes a look at the cost of tax abatement programs as reported by local governments.

Among the 53 of the 64 counties in Colorado that posted their 2018 Comprehensive Annual Financial Reports (CAFRs) online, only 11 counties complied with the GASB 77 requirement for disclosing revenue lost to tax abatements. These are Adams, Arapahoe, Broomfield, Denver, El Paso, Douglas, Jefferson, Mesa, Morgan, Pueblo, and Weld counties. Altogether, they reported $34 million in foregone revenue in 2018.  Most abatements were applied to business personal property taxes.

About half of the 50 largest municipalities in Colorado – from (#1) City and County of Denver with over 664,000 people to (#50) City of Craig with just under 9,000 – complied with GASB 77 and reported $68 million in total foregone tax revenue. One entity, Denver Urban Renewal Authority, was responsible for incurring a $19.2 million loss due to various tax increment financing agreements. The City of Aurora also mentioned its hefty tax increment financing obligations though not as part of GASB 77 disclosures. As far as the compliant jurisdictions go, the quality of disclosure is decent, with many going above and beyond the GASB 77 requirements to also name the recipients.

In Colorado, there is a clear pattern of larger jurisdictions being more likely to disclose (R 2 = 0.74 for counties and 0.41 for cities). All compliant counties are among the largest in the state, while some of the smallest counties do not even have 2018 reports online. All 18 cities with 50,000 people or more complied with GASB 77. This is encouraging since larger jurisdictions often have more expensive programs. Reporting by school districts, however, leaves much to be desired. Out of the 72 school districts sampled here, not one mentioned GASB 77 even though all are required to adhere to GAAP.

While these revenue reduction numbers reported by local governments in Colorado are not particularly outrageous, it is important to keep in mind both the issue of potential under-reporting (due to flexible interpretation of what counts as tax abatements) and the context of an already austere tax regime. More pressingly, we still do not know the cost of economic development shouldered by public schools.

See the list of Colorado localities that complied with GASB 77 in 2018.