Eagle County property assessments continue to rise
What the value increases mean for property tax bills will be determined by taxing districts
EAGLE COUNTY — Eagle County Assessor Mark Chapin has seen the highs and lows of the local real estate market. That market is definitely on a high right now.
The main part of the county assessor’s office is an every-other-year project to determine the assessed value of all property in the county. That assessment is then used by the nearly 80 taxing entities in the county as those entities set property tax levels in their annual budgets.
After the recession that began in 2008, the assessed value of some property in the county declined by as much as 50%.
Chapin said those losses were fully recovered around the county with the 2017 assessment. This year’s assessment, which measures a snapshot of values as of June 30, 2018, is showing solid gains around the county.
Chapin said the median value increase across the county is about 10% in this round of assessments.
Vail, Minturn and Red Cliff posted some of the strongest gains, at about 15%.
Those values are set largely by research into sales of comparable properties. Also, an assessed value is often different than the market value of a property.
Eagle and Gypsum also showed strong gains, with the Eagle Ranch area posting a median gain of 17%. Median values in Gypsum rose by 9.5%.
Need to appeal?
Now that notices of valuation have been sent out, there’s an appeals process. The first step is going through the assessor’s office. If a property owner isn’t satisfied with that, the Eagle County Board of Equalization will hear appeals this summer. Further appeals can go to binding arbitration, or, ultimately, district court.
Once the county’s assessment values are set, the valley’s taxing entities — from school districts to metropolitan districts of just a few homes — will set their mill levies as they establish their 2020 budgets.
Many of the town’s jurisdictions can leave their mill levies — essentially tax rates — set at current levels. Rate increases require voter approval. Those entities’ voters have exempted themselves from the revenue limits imposed the the Taxpayers Bill of Rights, or TABOR, a state constitutional amendment passed in 1992.
Districts that haven’t exempted themselves from those constitutional limits have to drop their mill levies to stay in compliance.
For instance, the mill levies in Vail and Gypsum have remained constant for a number of years, since voters exempted those towns from the TABOR revenue limits.
Dan Dougherty, chief communications officer for Eagle County Schools, wrote in an email that the district has to drop its mill levies as assessed values rise. Revenues declines can be made up through state funding.
The residential/commercial split
Perhaps more important than mill levies is the assessment rate — the percentage of a property’s value subject to taxation.
Assessment rates are subject to yet another state constitutional amendment: the so-called Gallagher Amendment, passed in 1982. That amendment sets in law a permanent split between residential and commercial property. Commercial property must make up 55% of a jurisdiction’s property tax collections, with the remainder of the burden on residential property.
As the state has grown, there’s far more residential than commercial property, meaning the assessment rate for commercial property is regularly reduced.
According to Vail Finance Director Kathleen Halloran, that rate is currently 7.2% for residential property. That means 7.2% of a home’s assessed value is taxed.
Because of the increase in residential property values, the Colorado Division of Property Taxation in April announced that the rate will be 7.15% for the 2020 collection year. Halloran wrote that the last decline cost the town roughly $500,000 in tax revenue.
The decline in the residential assessment rate has hit smaller districts especially hard, since those districts count almost exclusively on property tax collections.
Gypsum Fire Protection District Chief Justin Kirkland said voters in 2018 approved a measure that allows the district to continue to collect revenue at the old assessment rate of 7.2%.
“We’re grateful to the voters for that,” Kirkland said. As residential values continue to rise, it’s likely the state’s residential assessment rate will continue to fall.
Chapin noted that commercial property owners will continue to pay a disproportionate share of the property tax pie.
“There was a state committee formed, and they’re still looking (to correct the imbalance),” Chapin said.
We all know Eagle County is short on workforce housing. But a recent report shows there are still barriers to building.