Aurora wants to give the Gaylord hotel company a big subsidy to build a hotel next to Denver International Airport. On Monday, the State had a hearing to talk about it. This is how I used my five minutes.
I will address two points:
1. High Point development does not depend on a $950 million public subsidy.
2. Gaylord will cost Colorado school kids $240 million over 30 years, at $10 per kid, per year.
There is essentially no chance prime development property in the shadow of DIA will remain empty for the next 30 years.
This is not our first rodeo. We've been through this before. In 1929 we built Stapleton, an unimaginable distance out from Denver. Forty years later it was landlocked -- engulfed by (tax paying) development. Sixteen-year-old DIA won't be any different. Well before Gaylord's thirty year bonds are paid off, by age forty, DIA's neighborhood will be as fully developed as Stapleton's. Look at Kansas City International Airport -- built in the middle of no place and now surrounded by (tax paying) development.
That means Gaylord's subsidy really does divert around $240 million from Brighton 27J School District -- of Gaylord's $401 million total property tax capture, 60 percent, around $240 million comes from the School District. The School District loss is back-filled by money taken from the State's other 177 school districts.
This is how it works. Every year the legislature decides how much we'll spend on each of Colorado's 817,000 school kids. With the recession, it's now frozen at about $6,000 per kid. Each of Colorado's 178 school districts figures how much it can raise from its local property tax base. It uses its constitutionally mandated mill levy -- a maximum of 27 mills. A few extremely wealthy districts (e.g., Aspen) can cover the whole $6,000. Typically a local district only manages around 40 percent. The State pays the rest -- by far the State's largest General Fund line item. Gaylord will grab the property taxes a non-subsidized development would have paid to the School District -- $240 million over thirty years or $8 million per year.
If the legislature had the revenue, it could make up that $8 million to the schools. But it doesn't. Since the recession started in 2008, it has balanced the budget by cutting school funding every year. That's why we're now $1 billion under the level mandated by 2000's Amendment 23 and we've frozen funding from at $6 thousand per kid. Diverting another $8 million means all 178 districts suck it up and each of Colorado's 817,000 school kids kicks in $10 per year to subsidize Gaylord.
So this is the question you get to answer: Is Colorado better off using this money for the kids or giving it to Gaylord?