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Larry Banman: Tax notices reveal more than a bottom line

Larry Banman
Without a Doubt

“Nothing is certain but death and taxes,” according to Benjamin Franklin.

Most of us are familiar with that quote. An expansion of that quote is, “Our constitution is an actual operation; everything promises that it will last; but in this world, nothing is certain but death and taxes.”

An amusing quote I found on the same topic is, “There will always be death and taxes, however, death doesn’t get worse every year.”

My own philosophy isn’t as fatalistic, but the annual property tax mailings often remind me of those quotes.

The most simple reaction to those annual notices is to groan. Some may even go through the various steps of grieving. Most property owners in Grand County, no doubt, remember the reassessed values we received in 2007. They went up dramatically. Property owners in the West Grand School District also have the factor of a major bond issue that played a part in the property tax assessments.

With that as a background, I have been curiously waiting for the property tax notices that we all received last week. Before I continue, let me reveal my personal situation and thus, my biases. My wife and I own a moderately priced home in Kremmling as well as a moderately priced commercial property. Therefore, I know of the disparity between the tax rate for residential property as opposed to the tax rate for commercial property. Last year, the value of the commercial property increased 28 percent while the value of the residential property increased 17 percent. I didn’t protest either because I thought they were valued at a rate that was close to their market value. The increased valuation, plus the West Grand School bond issue, both affected me directly. My residential property taxes are escrowed as part of my mortgage payment while my commercial property taxes are due as either one or two lump sum payments. That makes us fairly typical in the realm of private property owners.

I heard a couple of reactions to tax statements prior to seeing my own tax statement. They were negative, so I prepared for the worse. At first blush, I thought my taxes had gone up dramatically but, upon closer examination that wasn’t exactly the case. My commercial taxes went up 9 percent, while my residential taxes actually decreased by 1 percent.

I assumed the 9 percent increase would be entirely the school bond issue. Wrong again. In actual dollars and cents, I am paying the school district $18 more per year on my commercial property and $29 less per year on my residential property. That makes a net gain of $11 per year. That likely means the larger commercial properties are feeling the pinch more than I, while many residential owners are actually seeing a decrease.

My increase in taxes is not something I take likely. In a volatile economy and after a year of significant changes in my life, paying the commercial taxes will call for a little belt tightening. The increase, however, is not as dramatic as feared.

I was curious where the increase did come from. If you look closely at your tax bill, you will notice certain entities were able to keep their existing mill levy. Taxes are a function of mill levy and assessed valuation. When the mill levy is fixed, and multiplied by the increased assessed valuation, the resulting increase is simple mathematics. By state law, a school district can only collect a designated amount per pupil. Therefore, when the assessed valuation was increased, the mill levy had to be lowered to compensate for that increase.

When looking at taxes, the other thing I look at is the level of services that are received by those entities to which I pay taxes. For example, I pay about $175 per year in taxes to support the Grand County Library District. For me, even though I rarely use the library, I am more than willing to pay that amount to have that system in place for my community and for my county. I do the same for items like snow removal, police protection, fire protection, medical care, street and road maintenance.

Almost invariably, I try to think what it would cost me to do the same thing myself or have it done privately and I believe I am getting a pretty good return for my tax dollar. Even though there are some services I have never used, I am willing to pay a price for that time when I need them or when my friends and neighbors need them. I always try to remember that the world is larger than my immediate realm of existence.

You can look at each entity on your tax statement and make those same types of value judgments for yourself.

If you don’t think you and your community are receiving the type of return that you think is appropriate, then you need to get involved. Find out more about that entity. Maybe there is a part of the picture that you don’t fully understand. Perhaps your view of community needs to be larger. Perhaps that entity needs to be more accountable to the taxpayers. Perhaps your research will help streamline government. It is all part of the form of government we have in this country, state and county.

Take another look at your taxes. Make sure you understand what is happening. Don’t jump to inaccurate assumptions. And, finally, look at what you receive for those taxes. It may or may not be as awful as you first believe.


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