Breaking down the districts
October 6, 2016
The founding father Benjamin Franklin made many sayings famous during his lifetime including the apropos statement, “in this world nothing can be said to be certain, except death and taxes.”
This month the Sky-Hi News is beginning a new series of articles focusing on the special taxing districts in Grand County. We will review types of special districts, their organizational make up, services provided and taxes levied. According to information provided by the Grand County Assessors Office there are a total of 85 taxing authorities in Grand County, including the County and six municipalities.
When most of us think of taxes, especially those who are not home or property owners, we tend to fixate on payroll or income taxes. Our annual filings with the State and Federal government, and regular FICA deductions, keep those forms of taxation in the forefront of many people’s minds. But income and payroll taxes are only a portion of the myriad forms of taxation to which citizens must acquiesce.
When most of us think of local taxation we think of counties or municipalities. But there are other entities that have the legal authority to assess taxes. They are broadly called “special districts”, or “special taxing districts”.
Special districts are technically governmental entities with the authority to levy taxes but their existence is inherently separate and largely independent of other governmental entities such counties or towns.
Special districts are typically created to provide a very specific service or for relatively narrowly defined reasons. Examples of special districts include fire protection districts, water and sanitation districts and recreation districts just to name a few. Special districts typically have specific boundaries but usually do not encompass entire counties.
As such a given property owner in Grand County may find their home or property located within the boundaries of multiple different special districts. Many districts, though not all, levy taxes on properties within the boundaries of their district. Each district can levy taxation within their district independently of additional taxation levied by other special districts, which may overlap their own.
Most local taxation takes the form of fees, such as vehicle registration fees, and property taxes. The level of property taxation a property owner must pay is based upon two things: the value of a given property and the number of mills assessed (mills derives from the term mill levy which, for our purposes, is more or less the same as saying “tax rate”). Special districts levy taxes by assessing mills on property values.
A mill is equal to one one-thousandth of the assessed value on a piece of property. For each mill levied by a taxing entity a property owner must pay $1 in taxation for every $1,000 of assessed value on the property.
Grand County Deputy Assessor Dan Korkowski offered a simplified explanation for understanding how mills and mill levies work saying, “To calculate it take the assessed value and multiply it by the mill levy number. Then divide it by 1,000.” For example, if a home is valued at $100,000 and there is one mill levied on the property a homeowner would owe $100 in property taxes.
Because special districts can levy mills on property and because most special districts do not encompass entire counties homes right next to each other, or right across the street from one another, can have drastically different property tax bills each year.
Districts can and do change their mill levies, often increasing mills when operational costs increase. If a special district increases their mills all property owners within the special district will see their property tax bill increase. Special districts are typically made up of a Board of Directors that are elected from and by property owners within a given special district.
Despite the importance of the role played by special districts and despite the fact they can force citizens to part with their money through taxation many people remain confused by the unique nature of special districts, how they operate and where the line dividing them from more traditional forms of government exists.
We hope this ongoing series will enlighten citizens on this very important yet often misunderstood facet of local governance.