City Hall Showdown in Colorado Springs

03/18/2010 05:12 am ET | Updated May 25, 2011

It's called a budget hearing, but on one side are anti-tax advocates who are positioning to defeat ballot measure 2C, and on the other side is the Colorado Springs City Council that put 2C on the ballot. Both sides meet this week (October 22) during a live-telecast from the city council chambers

They will be grappling with the city's worst financial crisis in recent memory.

The budget would have been controversial enough, but now that council member Tom Gallagher has broken ranks and called on his supporters to create a public outcry with a "tea party" at the budget hearing, the meeting could have all the drama of a UFC cage brawl.

"Decorum doesn't get results. I wrote the e-mail to engage the public," Gallagher said. "For the past four budget hearings there have been fewer than 40 people. The meeting is the public's only opportunity to participate. I want to see ordinary citizens engaging in the process of making this a better community. Some people have figured out how to do that."

The City Council voted 8-1 last August to put 2C on the ballot in hopes of raising enough revenue through a mill levy to sustain operations at 2009 levels. Gallagher voted with the council but insists he only voted to refer the measure to the ballot without actually supporting 2C with a comment.

The campaign for 2C began when council member Jan Martin heard from the city manager that the city's revenue structure was unsustainable at 2009 levels, so Martin began a grassroots campaign this summer to bring attention to the kinds of services the city provides its citizens. She unveiled a plan to raise money that would allow the city to operate in 2010.

She and her followers have met in kitchens with constituents, put up lawn signs, hosted neighborhood talks, and enlisted supporters, including an outreach effort on Facebook. Her message is clear: all 2C asks for is the same budget as last year. It won't balance the budget or solve any of the other financial problems.

"Even if 2C wins, all it does is stop the bleeding."

Martin won't stand toe-to-toe with anti-tax people trying to convince them the merits of a property tax increase. "One of the problems with 2C is that it is really not a tax issue. 2C is about giving the voters a chance to choose what kind of city they want to live in."

Mary Ellen McNally, a former city council member and now a respected local organizer worries that voters in the upcoming November 3 election may not understand how dire the situation really is. "The current climate is a result of the city's conservative nature over the years," she says, herself a moderate Republican. "It's disturbing. If 2C fails, it will be a disaster for the city."

McNally is concerned that 2C's opponents are looking beyond the property tax increase. What they want is to replace civic government with something that has no relationship to the public good, said McNally. "If they could privatize all the services the City now provides, they would."

Those expected to show up at the budget hearing are tax reformers, teabaggers, right-wing Republicans and fiscal conservatives -- most of those who have welcomed Gallagher's memo. The lone daily newspaper, The Gazette Telegraph, a long time bastion of libertarian and conservative values, lauded Gallagher's call for across the board salary cuts for civic employees on its editorial page. But this does little to fix the problem.

The issue, now clouded by rhetoric, is that the city has relied upon one source of revenue to fund operations for decades -- a sales tax. This strategy worked until 2006 and has failed since due to many other factors, including the shifting demographics of the aging baby boomers who spend less, along with a major market shift away from bricks and mortar retail to service-oriented businesses. There are also the shopping malls and big box retailers that moved beyond the city limits to avoid sales taxes.

Raising property taxes is the last available option in one of the stingiest city governments in the state, if not the nation. The city ranks 48th in the lowest state tax collections of personal income with 4.9%. Colorado Springs had the 2nd lowest general tax revenue in 2009 budgets among 11 comparable cities; in fact, one-third less. Its per capita tax revenues in the city have grown from 1.3% to 1.6% since 1998. It is also rated in the top 15 as a desirable place to live in the nation, and not because of the taxes. Colorado Springs has not suffered from profligate civic spending. All it asks for is the same budget it had last year.

With a couple of videos and a few brochures Jan Martin and her supporters set off each day trying to educate an electorate that has been fed on a steady diet of FOX-style anti-tax dogma over the past decade. Martin, for one, does so because she believes it's time to take a stand, win or lose.

"For a long time we have allowed only one voice to be heard in this town," says Martin. "This (2C) campaign is to provide a voice for those in the community who care about quality of life issues like parks and mass transit. I think we have more voices than our opponents do."