Skip Navigation

Rediscovering Tax and Regulatory Powers at the Local Level

November 1, 2018

Colorado is a swing state, and Broomfield County, where I live, has an unusually diverse electorate, with roughly equal shares of Republicans, Democrats, and unaffiliated voters.

Colorado is a swing state, and Broomfield County, where I live, has an unusually diverse electorate, with roughly equal shares of Republicans, Democrats, and unaffiliated voters.

The upcoming midterm election has brought out the grassroots in Broomfield, and a major issue is fracking. This issue has led to heated debates in the City Council, including a failed attempt to recall the mayor. After years of negotiating with energy companies, the City Council adopted regulations that allow drilling. However, there are extensive regulations on the location of drilling wells in the county.

This year, Initiative 97 would mandate that new oil and gas development projects in the state be a minimum distance of 2,500 feet from occupied buildings or other areas designated as vulnerable. The Republican Party opposes Initiative 97. Candidates usually discuss the fracking issue with reference to its impact on energy companies, economic growth, jobs, energy independence, environmental issues, etc.

What politicians in Colorado often ignore is the diversity of views on fracking in different parts of the state. Colorado includes some of the richest and poorest counties in the nation. Our western neighbor, Boulder County, for example, has a major university, and is one of the wealthiest communities in the nation. It should not be surprising that Boulder is progressive, or that the county prohibits fracking. Our eastern neighbor, Weld County, is primarily rural, with a relatively low income per capita. Weld County produces more oil and natural gas than the other counties in Colorado combined. This reflects regulations on fracking and other rules designed to attract energy companies to drill for oil and natural gas.

With Initiative 97 on the ballot, grass-roots movements are very aware of what is at stake for the energy industry. State and local governments in Colorado working with the energy industry have created one of the strongest regulatory systems in the country. That regulatory system allows citizens to make decisions on fracking, as well as other decisions, at the local level. When fracking decisions are made at the local level, citizens have more incentive to become involved in the decisions; and elected officials must respond to their constituents, or face the wrath of voters at the ballot box, as was demonstrated in Broomfield County.

The outcome in Colorado has been a diverse set of regulations on energy companies, reflecting the interests of citizens in the different counties. Clearly, not all citizens are happy with the fracking decisions made by their local officials. Citizens can vote with their feet when those decisions are not to their liking; indeed, some of my neighbors moved out of Broomfield County because they disagreed with the City Council decision on fracking.

Initiative 97 would impose regulations on fracking statewide, and deny citizens the right to make these decisions at the local level. When fracking decisions are made at the state and national level, there is less transparency and accountability. Special interests have more success in influencing the decisions of a few hundred state legislators than when they must convince a broad spectrum of the electorate, especially with the diverse electorate in Colorado.

When I served on the Tax Commission in Colorado, I was struck by the diversity of views on tax and regulatory policy in different parts of the state. In the hearings we held across the state, it was clear that citizens valued their right to make tax and regulatory decisions at the local level. Our commission conducted a poll that asked citizens whether they thought the government wasted their tax dollars. The poll revealed that a large majority of citizens think that their local governments are more fiscally responsible, but that the state and federal government waste much of their tax dollars.

The Colorado Constitution created one of the strongest federalist systems in the nation, retaining tax and regulatory powers at the local level, and constraining the powers of the state government. But this strong reliance on local government has eroded over the past century as tax and regulatory decisions have shifted to the state and federal government. This election provides an opportunity for the citizens of Colorado to rediscover and reinforce the tax and regulatory powers granted to them in the Colorado Constitution.

[Originally Published at the Colorado Springs Gazette]

Article Tags
Taxes
Author
Barry W. Poulson is Emeritus Professor of Economics at the University of Colorado.
media@heartland.org