Vail Valley Voices: Why your property tax bill increased
This column is meant to help property owners understand the background of the recent tax bills received and summarizes the valuation and tax system presently set up in Colorado. Assessors in Colorado reappraise every odd year (two-year reappraisal cycle). For 2009 and 2010, the appraisal date is June 30, 2008. The appraisal data collection period extends to the 18 months prior to the appraisal date, and in the event there is not adequate sales data, the assessor goes back in six-month increments up to five years to collect the data. According to statute, all data is adjusted to the final day of the data collection period; i.e., a time adjustment must be calculated, according to C.R.S 39-1-104(10.2) (a) & (d). This adjustment oftentimes results in an estimated value which is different than the actual sales of individual property during the period. Each county is then audited by an independent audit firm employed by the state to ensure that the assessor has complied with state law. Eagle County successfully passed the 2009 audit. With this current assessment, we experienced two significant events: Sales of individual property continued to rise as sales volume dropped off toward the end of June 2008. The difficult part for everyone involved with property in our area was the rapid decline in sales experienced in the late summer and fall of 2008, continuing to date. Recorded sales and MLS data compared to sales data and estimated values during the peak period indicate the market values have dropped significantly with continued declining sales volume to date. This most recent and limited data will be used in the reappraisal we are currently preparing for, which will go into effect in 2011. The appraisal date for that reassessment is June 30, 2010.Of course, the crux of this commentary is in regard to the recent mailing of tax bills by the county treasurer. Here is how tax bills are calculated: To derive property tax, the actual value of the property is multiplied by the assessment rate set by the state. Currently, the rate is 7.96 percent for residential properties and 29 percent for all other property. The assessed value is then multiplied by the total mill levy within a tax area. In Eagle County, total levies vary from 35.089 to 136.231 mills, based on the combination of taxing entities within a taxing district. Each separate district has a combination of entities, such as the county, towns, schools, fire districts and metropolitan areas, among others. Property owners can determine which entities they pay taxes to on the front of their tax bill. The budget process for entities occurs in the fall of each year at publicly posted meetings. At that time, most (if not all) separate tax entities appointed or elected boards meet to determine budget needs for the following year. While the tax base is established by the assessed value within each entities boundary, the revenue needs are calculated by each entity individually. Here are the steps: The total assessed valuation within the XYZ tax entity is $1 billion, the revenue determined to be needed to operate for the next year is $1,398,000. $1,398,000 divided by $1 billion equals .013980 or 13.980 mills. The resulting tax is based on 13.980 mills times the assessed value. If the assessor’s estimated actual value is $300,000, the assessed value at 7.96 percent is $23,880. The taxes paid into the XYZ tax entity are calculated in the following example: $23,880 assessed value x .01398 mill levy = $333.84 property tax. This basic example is the simplest calculation to determine taxes based on revenue needs for an individual entity. In Eagle County, we have 80 different tax entities combined into 130 tax districts. Of those 80, 34 lowered their mill levy for 2010. Of those 34, eight decreased revenues. Twenty-five total tax entities received either a nominal increase or the revenue to be collected went down. All other entities increased revenue for 2010. The unfortunate result of the increase in assessment and the bulk of mill levies which went down slightly or remained the same for 2010 is an increase in property tax for property owners this year. Property owners can obtain property valuation and taxation information at http://www.eaglecounty.us, or call the Assessor’s Office at 970-328-8640. Mark Chapin is the Eagle County assessor.
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