Another type of business that has been wooed to the area is amateur athletic organizations, attracted by the beautiful surroundings and the presence of the U.S. Olympic Training Center. In the late 1980s several of these groups applied for tax exemptions and were denied.
The reason was a forty-year-old reading of Colorado's law, which stated that in order for state taxpayers to subsidize an organization's tax break, the organization had to primarily benefit the citizens of Colorado. State tax examiners ruled that groups such as USA Team Handball did not.
This displeased Colorado Springs officials, who saw the law as a threat to the trouble they'd gone to to attract the sports organizations. So in 1990 they pushed for a rewriting of the tax law to ensure that it would no longer restrict tax breaks to companies that mainly helped out state residents. The state legislature was convinced and changed the law. Just to make certain, the lawmakers also added to Colorado's tax laws a special provision that exempted certain national and international amateur athletic organizations from paying property taxes.
Not surprisingly, El Paso County taxpayers are now subsidizing the bulk of the state's amateur athletic organizations. Of the $43.7 million worth of tax-exempt property in this category, $42.7 million of it is in or around Colorado Springs.
In the case of USA Basketball, it can be argued that the new laws have resulted in some strange subsidies. The association, which is housed in a $580,000 tax-free office building in Colorado Springs, is the designated governing body of basketball in this country, from high school to the National Basketball Association. But by far, its two main events are fielding national teams for the Olympics and the World Championships, both of which are held every four years.
Since 1992, however, these national teams have been manned by National Basketball Association professionals--Michael Jordan, Magic Johnson, Shaquille O'Neal--who together earn hundreds of millions of dollars each year. So why does USA Basketball still need a tax break?
"Security costs are much higher with professional athletes," points out Craig Miller, a spokesman for the organization. "And then you've got insurance. These players are worth millions and millions of dollars. If Michael Jordan had blown his knee out in 1992 during the Olympics, who would have paid for that?"
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Fraternal organizations: The Elks, the Eagles and the Loyal Order of Moose, among others, make a big deal about how much charity work and community service they provide. And for many years they received tax relief on that basis. But in the mid-1980s, Whitfield recalls, her department decided to take a closer look.
"We got to looking at them, and we believed that there was considerable change in the way these organizations operated today as opposed to the way they operated in the 1930s and '40s," she recalls. "It seemed that, back then, they did more in the way of providing charity to their members and others. But since that time, much of the work they did has been picked up by the government."
After the Division of Property Taxation did some digging, it concluded that some of the organizations--a Moose lodge in Loveland, for one--seemed to resemble social clubs more than they did charitable organizations. Several of the lodges that had become accustomed to a tax exemption were denied.
So the frats went to the State Capitol and rounded up some friends. In 1987, SB 40, sponsored by then-state senator Wayne Allard, granted fraternal organizations their very own tax-exemption category. Since then, the Masons, the Moose and the Elks have been relieved of the sticky business of proving to the state that they are charitable. They are simply presumed to be.
