Vail Daily’s View: County will keep that tax windfall
Vail, CO, Colorado
Under the “surprise to no one” category, this announcement from Eagle County’s government this week: We’ll probably keep those property tax gains, thank you very much.
The few homes that are selling this year may be going for 25-30 percent below what have been their value in the real world. But thanks to an anomaly in how how properties are assessed for tax purposes, the tax bill through the Vail Valley actually will rise about 12 percent on average.
Two years ago, the bill rose by an average of 40 percent. The county and nearly all other municipal governments have kept that, too. So, paying the same property tax rate — if you own a home, land or commercial space, your actual property tax bill has risen by over 50 percent since 2007.
Now that we’re struggling through the Great Recession, the county and other governments are suffering like businesses and individuals through losses in revenue from sales tax, building fees (who’s building?) and so on.
Before, they kept the revenue because, well, they could. Now, they are keeping it because they need it more than you do.
Either way, it’s as clear a signal as can be that your bills mean less to government than government’s bills.
Maybe that’s true. Maybe roads, our children’s education and a neighborhood’s need to build a new swimming pool do indeed trump an individual’s ability to pay the mortgage and feed the family.
In the case of the swimming pool, however, the neighborhood chose — a couple of times now — to go for the pool and some other improvements.
Too bad the rest of the county can’t choose where a 50 percent increase in their property tax bill will go. Maybe the revenue amount is not all that much to the county and 80-some-odd other property taxing entities in Eagle County, but that’s real money to the folks paying those bills. And it affects at least some of those property owners quite directly in these times.
Maybe the taxman’s next property assessment will reflect today’s reality and the tax bill two years from now will drop accordingly. Then government will suffer a bit from the drop while other revenue picks up. Property values are unlikely to recover by the end of June 2010, when the assessment is completed, after all.
But what of the property owners under stress now, facing increases in their tax bills, now?
A real problem county and other local governments see is that dropping their tax rates is easy enough, but any proposal to increase the rate must pass in an election. That’s tough to do, and so the governments are loath to drop a rate now that they might have to ask the voters to give back later.
And ultimately, the voters let virtually all the property taxing entities increase property tax revenue this way in elections “de-Brucing” from the limits of TABOR, the tax limitations amending the Colorado Constitution since 1992. “De-Brucing” is named for the father of TABOR, Douglas Bruce.
It made sense because the “ratchet” effect of the limits was at least as draconian as government keeping 50 percent increases seems crazy now.
Is there really no middle ground here? No break for taxpayers struggling now? No rebate, no temporary tax credit? No inclination at all to knock a few points of the mill levy to help constituents now even if that means local governments may need to ask their constituents to reinstate later?
The bottom line here is that government trusts the people about as much as the people trust the government.
So they’ll keep all the tax revenue they can, even if it reflects a reality that simply is not true.
Vail Daily Editorial Board