Grand County property taxpayers buffeted by the ‘perfect storm’
The perfect storm.
That’s what Grand County residents who have been hit with huge property tax increases this year are experiencing. So, before irate property owners march off on a witch hunt looking for someone to burn at the stake, they should consider the factors that coalesced to cause this tempest:
– 2007 School Finance Bill, SB 199: Gov. Bill Ritter and the Colorado Legislature adopted this last year. It eliminates a provision in the School Finance Act of 1994 that required districts to lower their mill levies as property values rose in order to comply with the revenue limits of TABOR.
Thus, in districts that have “de-Bruced” ” and that’s 175 of 178 statewide ” mill levies could be frozen this year, allowing districts to reap a windfall directly proportional to the rise in assessed valuations.
– Voter-approved bond issues and ‘de-Brucing’: Grand County voters approved every bond issue on the ballot last November. In one case, the result was a near-tripling of the mill levy, which is used to calculate property taxes.
Thomas Jefferson famously said that in a democracy, “People get the government they deserve.” Well, we didn’t see many Grand County taxpayers at budget meetings last fall when mill levies were set.
Elected officials did what they thought was best, and no one was there to tell them differently.
Plus, county voters in the late-1990s exempted Grand County from TABOR’s revenue limits. So, the county is permitted to raise revenues substantially year-to-year, which it did this year.
– Rapidly increasing property values: This one’s the real issue. We’ve heard anecdotal tales of property assessments coming in at three times the asking price for various properties. That, obviously, would be problematic at best, and owners of such property certainly would have been well advised to protest their valuations. Ditto for anyone who considered their assessment way out of line.
Beyond that, it remains an indisputable fact that Grand County, as well as other mountain and energy-rich counties in Colorado, have defied the national trend during the past 18 months of declining or flattening property values.
In fact, in many areas of the state, real estate values are climbing at a dizzying pace.
The upshot, absent a mechanism to cause some deviation, is that property taxes can be expected to ascend on the same steep arc.
– Timing: If location, to quote the cliche, is everything when it comes to real estate, then it can be said that timing is everything when it comes to tax increases. The timing of this particular tax increase couldn’t have been worse vis-à-vis the perceived meltdown of the national economy. Few things provoke angst among the masses more readily than talk of a deep recession.
Not that any of these explanations make the sticker shock of this year’s tax notices easier to stomach. Moreover, serious ramifications accompany the trend that is apparent when it comes to Grand County property taxes.
According to information posted on the county Web site, property taxes collected by all taxing districts within the county have nearly doubled in the past five years. This is not taking place in a vacuum, as anyone who works for a living here can attest.
In fact, it is precisely this reality that continues to force the exodus of the working class from resort communities throughout the state. And it affects newcomers and longtime residents alike, as the cost of property taxes eventually forces homeowners, many of whom do not wish to, to sell their houses and relocate to communities where they can afford to live.
Rising property taxes also tend to push rents higher. In short, big jumps in property taxes exacerbate Grand County’s affordable housing problem.
Bottom line: If taxpayers are concerned about rising property taxes, they need to be more attentive to what local governments are doing.
Local governments, for their part, should do what they can to attract large commercial taxpayers who can lighten the load on average homeowners and renters. And, they should cut the little guy some slack locally when, as is the case now, they are besieged by national economic factors beyond their control.
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