Tax bills may take small bites
EAGLE COUNTY — While the local real estate seems to be stabilizing, property tax bills are still falling, thanks to the vagaries of state law.
In the same way the county’s property assessments were still climbing even as the real estate market was collapsing, the number-crunching for the latest valuation cycle came while the local market was still in the doldrums. As a result, the county’s assessed value — the numbers used in figuring tax bills — is still far lower than it was during the peak of the past decade’s real estate boom.
So what does that mean for your property taxes? The short answer is: It depends. Eagle County Assessor Mark Chapin said the last valuation cycle showed continued declines from Edwards west, with the values holding steady, or increasing slightly, in resort areas in the eastern part of the county.
There were some steep declines in the western valley — the value of one Colorado Mountain News Media employee’s Gypsum townhome fell by 50 percent between 2011 and this year. But that doesn’t mean the homeowner’s tax bill will fall by half — although it’s close.
The average property tax bill is split several ways, with towns, the county, the local school district and myriad special districts all taking a cut. The Eagle County School District takes the biggest share of any of those taxing agencies. The county’s towns take relatively small slices of the property tax pie, since sales tax is the real fuel for those government engines. Red Cliff, with a miniscule sales tax base, is the exception to the rule in the rest of the county, with the highest property tax rates in the county.
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No matter the districts a taxpayer lives in, tax bills will fall proportionately to the property’s decline in value — for most of the agencies that collect property tax. That’s going to hit some small special districts particularly hard, since they rely almost entirely on property tax revenue.
So why isn’t a 50 percent decline in value reflected in a tax bill? The short answer is the way the school district collects money.
District finance director Phil Onofrio said the district’s tax collections break down into two basic group: fixed tax rates — called “mill levies” — and fixed dollar amounts.
The fixed rates, set by the state, will collect more or less money, depending on a district’s assessed value. Fixed dollar amounts are used to pay bonds and other debts. The last time voters in the district passed a “mill levy override,” the measure allowed the district to collect a specific dollar amount. Voters had to approve that language in order to comply with TABOR, the state constitutional amendment that limits taxes and government spending.
In the case of taxes that raise specific dollar amounts, tax rates can go up and down to collect the money required.
In the case of the Gypsum townhome, Onofrio estimated that the school district’s share of the tax bill would be $340 in 2012, and $181 in 2013.
And, thanks to the various mechanisms in the TABOR amendment, it could take some time for tax rates to increase to the levels seen in the later years of the past decade, although that’s a far more complicated story.
Vail Daily Business Editor Scott Miller can be reached at 970-748-2939 or at firstname.lastname@example.org.