As former Governor John Hickenlooper said, “Two of the most important assets any town has are its library and its Main Street.”
Do libraries do anything for businesses?
Yeah, they do. The library has so many small-business resources to make owning and operating a business easier in Boulder. Here’s a list of services that are free, and freely available (though currently under threat of cancellation due to lack of stable funding):
- Meeting rooms and co-working spaces
- support with creating business plans
- access to financial and marketing research databases
- tech training resources like computer skills and email basics
- essential workforce development via direct support such as job coaching, including real-time interview practice, full-service resume review, skills building and a writing lab
- access to dozens of self-paced classes to learn new skills, upgrade existing skills and earn certificates and high school degrees
BLDG 61, the library's makerspace, has seen over 75 small businesses launched, including 12 patent applications. BLDG 61 is an incubator for small businesses. It provides free access to high tech tools like 3D printers, looms, woodworking equipment, laser cutters, a CNC router, and electronics.
Through BoulderReads, adult learners can get GEDs to go and work for small businesses. All of the services mentioned above are under threat due to lack of stable funding, and many of them are directly supported via grants.
Commercial property owners are not the same as small business owners
Businesses and their employees are heavy users of library services. But when people ask about how the district will impact businesses, we need to differentiate between businesses and commercial property owners.
While the exact percentage of commercial property in Boulder that's actually owned by residents living here in Boulder County is not known, from what we can tell, it’s less than 50%. According to the Small Business Administration (SBA), only 10% of small businesses own their own buildings. The Boulder Office of Economic Vitality does periodic informal business surveys, and in their most recent survey, they indicated that two thirds of businesses in Boulder lease their space, while only about 17% of local businesses own their own building.
Nationally, according to SBA, 50% of small businesses are actually home-based, and home-based properties aren't taxed as a commercial property.
What does the Gallagher Amendment do in terms of taxation on commercial property?
There’s no dispute that commercial property owners are disproportionately taxed in Colorado, and that this is a result of the Gallagher Amendment, not a library district proposal. The higher rates for commercial properties account for the fact that properties designated as commercial can sell things out of their space and therefore have a higher tax burden than residential properties.
Currently, commercial property is taxed at about 4 times the amount as residential property owners. And locally, this is true for how:
- the city of Boulder's own property tax is assessed on commercial property [14% Boulder property tax]
- Boulder County’s property tax is assessed on commercial property [28% of Boulder property tax], and
- Boulder Valley School District's tax is assessed on commercial property [54% of Boulder property tax]
The library district proposal does not change that taxing rate, because it is a matter of state law. In 2020, the Gallagher Amendment was repealed, which will lead to a greater level of predictability in terms of the taxes commercial property owners will pay, and will ultimately — down the road — stabilize the amount of taxes paid by commercial property owners over time.
The proposed library district represents a flat 4% increase on commercial and residential properties alike. That equals $23 per $100K of residential value, and $97.60 per $100K of commercial value. It’s true that commercial property owners pass those taxes on to small business owners through NNN (triple-net) leases. In that arrangement, the tenant agrees to pay for all real estate taxes. We believe, for most office type spaces, this equates to an additional $0.15 - $0.18 NNN cost per square foot per year.
To repeat: in accordance with state law, and in accordance with the way all city, county, and school district taxes work, the tax on commercial properties is levied based on the Gallagher Amendment, and in the case of the library, it's a flat 4% increase. If rental prices increase beyond 4%, that would not be due to the library district.
Supporting businesses as the district forms
If we want to talk about lessening the tax burden on commercial property owners, city leaders can focus on how they can use the savings they get from the library becoming a district (should voters approve it in November) to ease that burden during our COVID recovery and ease the burden on locally owned small businesses in Boulder.
The Library Champions have suggested a grant or rebate program for small business property owners in the intervening period. Ultimately, what the city does is up to the city, and residents should provide input to them. The library district itself can further invest in some business-focused services (such as a business helpdesk, for instance), that would help offset the increase for small, local businesses in the district area.
Should businesses support the library district?
Let’s be clear: Thriving cultural assets – such as arts, libraries, and parks – are a big part of what draws businesses (and people who become employees and customers) to a region. Attractive amenities attract.
So, yes! The answer is yes.
Having more libraries — and robust, accessible library services — also leads to a more educated workforce in the community, which is good for business. An educated workforce helps a business's bottom line, and the long term benefits of a healthy library system greatly outweigh the short term costs. It's a good investment to make for the community. That’s why we are driving the campaign to get stable funding for what the library does.
In the meantime, your library currently supports small businesses in countless ways despite massive budget cuts, and that’s why many small local businesses support the formation and funding of the district. If you're a local small business and would like to endorse us, please do that here: https://www.boulderlibrarychampions.org/endorse