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Tax refunds may sap services

Melanie Wong
Vail, CO Colorado

EAGLE COUNTY, Colorado ” A court decision that ruled Gov. Bill Ritter’s property tax freeze for school districts unlawful could also cost other local taxing districts millions in revenue, officials said.

If taxing entities, including the county, towns and special districts are not exempt from the Tax Payer’s Bill of Rights (TABOR), they would have to issue tax refunds and would have to prepare for slashed budgets in coming years.

TABOR limits the amount of property tax governments and other agencies in Colorado can collect, but many districts and municipalities have been “de-Bruced” by public votes, meaning they are exempt from the limiting laws.



A Denver District Court judge recently ruled that Ritter’s waiving of revenue limitations for school districts were invalid because they did not comply with TABOR laws. The case is being appealed, and several counties, including Eagle County, have filed “friend of the court” briefs defending their de-Brucing processes.

Possible repercussions of the court ruling may be that other “de-Bruced” governments may also find their exemptions ruled invalid.



“Others could file lawsuits based on the same theory,” said Eagle County attorney Bob Morris.

Some districts say the impact of that decision may force them to cut services, and others said it may put major projects in jeopardy.

If the county’s still has to follow TABOR’s rules, it would have to go back several years and refund any taxes over what TABOR would have allowed, said Eagle County Finance Director John Lewis.



Since Eagle County’s share of property taxes only increased an average of 3 percent over the last five years, Lewis said the refunds would not be significant.

The biggest refunds would be from the last year, when taxes jumped 38 percent due to increased property values. The county would have to refund about $2.5 million, which comes out to about $50 per person, he said.

The county could also continue the projects it is working on, such as expansion of the Justice Center and building the Stratton Flats neighborhood, with money from reserves.

The real trouble would come in the next few years when the county would collect less money, Lewis said.

“We would have to see what services we could cut because we’d be losing revenues,” he said. “It’s hard to say what it would be. It could be roads plowed less frequently or maybe a decrease in Health and Human Services.”

If the court decision is upheld, it could cost the county billions in the upcoming years, and may hit other taxing entities even harder, County Commissioner Peter Runyon said.

“Virtually every district that de-Bruced used a similar ballot language,” he said. “There would be huge repercussions.”

More than 100 special districts in the county, such as recreation and metro districts, could possibly be affected by the court decision. Towns such as Avon and Eagle are also de-Bruced.

Fred Morrison, general manager of the Eagle County ambulance district, said that being limited by TABOR and having to issue a refund would be difficult for the district.

The district is building a new facility at Traer Creek in Avon and is planning for future development in Wolcott, he said.

“We could probably refund the money if it was mandated, but we’d have to do some tricky financing,” he said.

Western Eagle County Metro Recreation District director Steve Russell said he isn’t sure how much money would have to be rebated, but that a rebate would likely affect whether or not some of the district’s big projects go forward.

The rec district plans to build a fieldhouse in Edwards as well as move and improve the ball fields at the Eagle fairgrounds.

“For the fieldhouse, the public has already approved the project and the bonds are approved. I don’t know what would happen with that,” Russell said.

In upcoming years the rec district would probably have to cut their services in light of the decreased revenue.

The district currently subsidizes all their youth sports programs, and budget cuts might hit those programs, he said.

Others, such as the Eagle Ranch Metro District would be less impacted.

The district had one of the largest increases in property tax revenue last year, collecting almost $687,000 more than the previous year. However, most of their increase comes from new construction, which is exempt from TABOR laws.

The additional money is being used mainly to pay the outstanding debt service, as well as for golf course operations, said Jim Adams of the Eagle Ranch Metro District.

Staff Writer Melanie Wong can be reached at 970-748-2928 or mwong@vaildaily.com.


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