Vail likely to ask voters to freeze residential property tax rates
Ballot measure would freeze assessment rates at 2020 levels; voters would need to approve further increases
- Colorado’s current residential assessment rate is 7.15%.
- The assessment rate for 2021 is expected to drop to 5.88%
- The decline could cost Vail $1.4 million in 2021 property tax collections.
- Voters must approve any increases in tax or assessment rates.
Vail is coming closer to asking voters to “stabilize” the town’s residential property tax collections.
Residential property in Colorado is subject to the 1982 Gallagher Amendment to the state constitution. The amendment requires residential property make up no more than 45% of all property tax collections. Commercial property makes up the rest.
Since far more residential than commercial property is built in the state, the assessment rate on residential property keeps falling. The residential assessment rate was 22% when the amendment was passed. It’s now 7.15%, and is expected to fall to 5.88% in 2021.
Gallagher’s erosion of residential property tax rates has hit rural special districts — fire and ambulance, library and school districts — particularly hard. Locally, the Eagle County Library District, Gypsum Fire Protection District and Eagle County Paramedic Services have in the past few years all received voter approval to freeze the assessment rates at current levels.
This year, facing significant declines in sales tax collections, the town of Vail is likely to ask voters to freeze the property tax assessment rate at its current level.
Possible big loss
Vail Finance Director Kathleen Halloran told council members on Tuesday the town expects to collect $1.4 million less in property tax revenue in 2021 due to the latest decline in the assessment rate.
That revenue is used for police and fire protection as well as other municipal needs Halloran said.
Before putting a measure on the fall ballot, the town will has hired Magellan Strategies to survey voter support of the issues.
David Flaherty of Magellan Strategies said his firm can survey likely voters through a combination of text messaging and email.
That survey will be finished in time for the council’s Sept. 1 meeting.
If the town asks voters to freeze residential assessment rates, voter education will be important. So will the wording of any possible ballot question.
Councilmember Travis Coggin said it’s going to be important to have a ballot question that’s as clear as possible.
Councilmember Jen Mason agreed. After reading the current ballot language draft, Mason said, “This means nothing to me.”
Halloran replied that the towns of Vail and Avon are working with Eagle County on consistent ballot language for a Gallagher relief measure. All three local governments are working on ballot issues. The state of Colorado also has a Gallagher repeal measure on the fall ballot.
Education is important
Flaherty said it’s going to be important for voters to understand what freezing assessment rates will mean. While special districts can make straightforward appeals about what maintaining property tax rates mean for public safety, Flaherty said it might be a harder argument to ask voters for revenue that will go into a municipal general fund.
Most voters prefer to know where revenue is going, Flaherty said.
Councilmember Kim Langmaid said while it might be hard to define specific uses for the revenue requested, “it’s important” to maintain revenue streams when possible.
Flaherty said it’s important to explain what services might be lost if revenue declines.
“You have to say, ‘If we lose $1.4 million next year, here are some (possible cuts),’” Flaherty said.
Councilmember Brian Stockmar recalled participating in a 1982 debate with Dennis Gallagher, for whom the amendment was named. Stockmar recalled that a point against the amendment was that it would displace “a lot of revenue needed for public services… that’s a big part of the reason I’m supporting this,” he said.
Vail Daily Business Editor Scott Miller can be reached at email@example.com.