EGSD anticipates $1M tax abatement in 2018: What it means for you
What is a tax abatement?
While tax abatements do raise taxes, the state does not technically consider tax abatements a tax increase and formally views tax abatements as recovering uncollected taxes. As such tax abatements do not go before voters for final approval like other tax increases.
East Grand School District will be adding a one-time-only tax abatement to this year’s mill levy when the school board certifies the mill levy rate for 2018, anticipated to occur in early December.
The tax abatement is the result of a decade-plus long taxing dispute between Grand County’s YMCA of the Rockies property and local taxing entities.
In 2018 East Grand anticipates a total abatement figure of $1,075,973. That figure represents the total amount of taxes, $182,275, improperly assessed on Snow Mountain Ranch between 2002 and 2004 as well as the total amount of taxes, $893,698, the school district would have collected from state and local sources between 2004 and 2016 had YMCA not been listed on taxation assessments during that time.
From 2002 to 2004, taxes were levied on the YMCA property. The property was later declared tax exempt but more than a decade of legal challenges followed before the Colorado Supreme Court declined to review a lower court decision in late 2016, effectively ending the legal battle over the property’s status.
The $1,075,973 tax abatement will result in an additional 1.9685 mills being assessed on top of the district’s other mill levy rate. East Grand’s basic mill levy rate is capped at 11.775 mills. Additional mill levy overrides, for a specific issues such as the district’s transportation override, increase the base mill total.
Last year’s mill levy, including all abatements and overrides, totaled 21.938. East Grand Superintendent Frank Reeves noted that tax abatements are common occurrences but are typically for much smaller dollar figures, often related to unpaid taxes by local property owners.
The addition of 1.9685 mills will result in an additional tax increase of $14.17 per $100,000 of assessed valuation on residential property. Commercial property will see a tax increase of $57.09 per $100,000 of assessed valuation on commercial property. Superintendent Reeves stressed the District’s desire to ensure local taxpayers understand this abatement will be a one time only occurrence.
“This is a one time abatement to make us whole,” Superintendent Reeves said.
While tax abatements do raise taxes, the state does not technically consider tax abatements a tax increase and formally views tax abatements as recovering uncollected taxes. As such, tax abatements do not go before voters for final approval like other tax increases.
The East Grand School Board has not yet approved the mill levy, or the tax abatement, but officials from the district anticipate the action in early December when the board formally approves the mill levy rate for the coming year.
Reeves said the district will receive the final assessed property valuation from the county in December, which will in turn impact the total number of mills assessed for the district’s various mill levy overrides. As such the district will not have a final mill levy total until after reviewing the final property valuations from the county assessor’s office.
According to Reeves, East Grand anticipates a budget surplus this year and said the total surplus figure is relatively close to the total abatement figure but added several other factors have played a part in the anticipated surplus. Over the summer as the district developed its budget officials anticipated a deficit and budgeted conservatively.
The district had also anticipated a decrease in student enrollment of four students. Instead, this year the district enrollment figures are up by roughly 50 students and East Grand has seen a funding increase for 37 full time students, providing a significant funding boost.
Additionally, YMCA of the Rockies refunded half of the $300,000 in interest payments the district paid to Snow Mountain Ranch after the taxing dispute was resolved. Those factors combined with the abatement produce the anticipated surplus.
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