Vail Valley Voices: The true value of open space tax
October 23, 2012
Here we are, Eagle County, coming down to election time. Wow. It has been said that in Colorado, the one elected office that has the greatest effect on your day to day life is not the president, nor a senator, nor the governor. It is your local Board of County Commissioners.
We are very fortunate to have five competent, intelligent candidates for the two open seats. They are all genuinely nice people who all want what is best for our community. Of that I have no doubt.
To better get to know the choices for yourself, set aside about three hours (I know, I know) and look at the debate that they had on Sept. 24 at http://eaglecounty.granicus.com/MediaPlayer.php?publish_id=103
You will learn that there are differences among them. Important differences. To me, the most critical issue that separates them is the open space tax. This is the one issue that will determine what we look like in 10, 20, 50 years. If we abandon it for short-term gains, we all lose. Remember that this tax expires in 2025 per the original ballot.
It has become apparent, not only from watching the debate but also from candidates’ literature, letters, editorials and general water cooler talk with friends that there is much misinformation regarding just how cost-effective the fund has been for the voters of Eagle County.
There is an effort by some to capitalize on this misinformation in a rising national climate of anti-tax sentiment. No matter what you may feel about this issue, please read on and become informed of the facts.
The first argument is that, in these tough economic times, we taxpayers can’t “afford” this tax. Are you sure? Let’s take a look:
o In general if you own or rent (your landlord pays the tax, but passes this cost along to you as a part of your rent) a $450,000 home, you will pay about $54 per year in open space tax. ($450,000 X .0796 X 1.5 mill =$53.73)
o Since there are typically two adults living in an average local home, that $54 should be divided by two to determine the cost of $27 per citizen per year.
o Because second-home owners own approximately 70 percent of all residential property value in the county, they pay 70 percent of all residential taxes. This includes the school taxes, the fire districts taxes, the library taxes, Colorado Mountain College taxes, and yes, the open space tax. The local 30 percent “only” contributed about $ 1,200,000 of the approximate $4,000,000 raised for open space. Let’s take a moment to give a heartfelt thanks to all of our second-home owners who subsidize so many aspects of our community.
o Since the very beginning, it has been the Board of County Commissioners’ policy to leverage our tax dollars, dollar for dollar, wherever possible. The current board has come close to that ambitious goal of matching contributions from outside funders like Great Outdoors Colorado, property owners, towns, the Bureau of Land Management, Pitkin County, homeowners associations, etc.
o Combining the above facts, our individual local couple’s $54 investment on open space has returned an additional $308 to the open space fund. Another way of looking at it is that local property owners only fund one-sixth of all of the cost of the open space land we have been buying and conserving. Name another government program that can make a claim like that.
o Prior to the 2007 collapse of the real estate market, there simply were not very many attractive land deals to be had in Eagle County. The board’s response was to build up the fund balance for future purchases. Luckily, we were then possitioned to take advantage of some very good opportunities that either were simply not available before the downturn or were simply too expensive. The simple lesson is that if we ever want to preserve land for future generations the time is now.
A new twist on the “we can’t afford this tax” debate I’ve heard lately is that we actually pay more than we think because we are also paying a part of commercial property’s share of open space tax each time we buy from local businesses here in Eagle County. Why? Because the open space tax is paid by the individual business owners and is rolled into his or her overhead, thus it is included in their markup. OK, sounds reasonable. Let’s see:
o I looked into a typical business and the property taxes it pays. Guess what? The open space tax represented .0002 of gross sales. So, if you, the local, buys, on average, $20,000 of non-food items in Eagle County per year, $4 of that will indeed go to the open space fund.
o So now, in the spirit of accuracy, we should add that additional tax to the total open space tax paid by our hypothetical local couple and increase it to $58 per year ($29 each). That is a little over 8 cents a day.
Another new argument entering the public dialogue is that when we place land under an open space designation, we effectively remove it from the property tax rolls. However:
o What they don’t tell you is that virtually every property we have acquired was previously taxed at the lower agricultural rate. It is common for a 500-acre ranch with a home and barn in a desirable district to pay less than $1,000 in property tax per year! This can easily be confirmed on the Eagle County website.
o Clearly, this “lost” revenue can be made up by the inevitable increased values of the adjacent properties. Don’t just take my word for it, read the “for sale” ads in the paper touting “next to preserved open space!”
Lastly, the argument shifts gears by that by not building a potential 320 new houses on the recent Edwards open space purchase, we miss out on a bonanza of new revenue to the county. Horse feathers!
o Study after study proves that residential property tax in Colorado does not cover the cost of providing basic services. Ask the developers of the proposed 800-plus unit Haymeadow project currently before the town of Eagle. During the approval hearings, they admitted that the property tax generated by their development would not cover the additional town expenses.
o Does no one consider the deterioration of quality of life for the existing residents? Most planners calculate that each house generates roughly 10 car trips per day. That would translate to an additional 3,200 cars driving through Edwards every day and almost 10,000 driving through Eagle. Really?
Now that you are fully informed as to the effectiveness of your open space tax dollars, you can better evaluate the commissioner candidates and their position on the open space debate. Ask yourself which candidate understands the effectiveness and importance of this tax.
Ask yourself if the open space tax actually is a tool to better manage our land use; for economic development, opening lands and rivers to recreational opportunities; to help create community buffers so we don’t become one continuous development from Dotsero to east Vail; to help preserve our mountain quality of life; to help preserve the very qualities that drew us to this mountain resort community in the first place.
Choose your candidates very wisely.
Peter Runyon is an Eagle County commissioner finishing his last term.