Rising mill levy funds boosting coffers, concerns across county
February 3, 2008
Steamboat Springs — Some Routt County taxing entities are seeing massive budget increases this year from escalating property tax revenues, creating a controversial windfall that is expanding the scope of local services but also raising concerns about the use of taxpayer dollars.
From new fire engines to increased programming for those with developmental disabilities, rising mill levy revenues will be put to noble causes. While virtually no one argues that value, there are widespread concerns about unrestrained taxes that are boosting the budgets – in some cases, by hundreds of thousands of dollars – of taxing entities across Routt County.
For example, Horizons Specialized Services collects 1 mill of property taxes countywide to provide services for those with developmental disabilities. On just that 1 mill, Horizons will collect $1,093,543 from Routt County taxpayers in 2008, a 34 percent increase from the $812,913 it collected last year.
The growth is even larger in smaller taxing districts whose appreciation has outpaced the county as a whole. Colorado Mountain College, which collects property tax only in Steamboat Springs, will see the revenues it collects on nearly 4 mills rise from $2,555,646 in 2007 to $3,543,311 in 2008, a 39 percent increase.
By comparison, the county’s base property tax will increase only 6 percent.
A mill is $1 of tax per every $1,000 of assessed property value.
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Routt County properties were reappraised in 2007 to reflect values as of June 30, 2006. It is this appraisal that will determine property taxes collected in 2008. The county’s overall assessed valuation has increased 34 percent since the last appraisal, but not all taxing entities’ revenues will increase by the same percentage as the properties in their district.
Colorado’s Taxpayer Bill of Rights, or TABOR, adopted in 1992, limits the growth of government revenues. In the case of property taxes, entities are required to reduce their mill levies so revenues will remain relatively constant, unless voters approve additional mill levy increases. TABOR does allow governments to adjust levies for inflation and new construction.
Taxing entities can ask voters to exempt them from the TABOR
restrictions that force them to lower their mill levies, and Routt County voters have done just that for a number of programs. In 2006, for example, voters approved two property tax increases for the Steamboat Springs School District. In 2005, voters approved tax measures for the Bud Werner Memorial Library expansion, the Purchase of Development Rights program and Horizons.
Most approvals have been for small levies, but with rapidly appreciating property values, all those small levies are starting to make a big difference.
Then and now
Former Steamboat Springs City Councilman Paul Strong called the increases that some taxing entities are seeing in Routt County “a big issue.”
“It’s a concern,” Strong said. “It’s caused problems elsewhere, where you start pricing people out of their homes.”
Strong said many voters, including him, probably didn’t realize when approving TABOR exemptions just how much some small mill levies would eventually rise. He said people tend to think of such taxes in terms of what they will add to their current tax bill, and don’t necessarily consider the implications of a future 34 percent increase in property values. Strong said the tax raises the county is seeing this year may affect his decision to vote for future exemptions from TABOR, even though he finds that state statute less than perfect.
“I think there’s some issues with TABOR, but there’s got to be a way to keep property taxes suppressed in areas of rapidly rising home prices,” Strong said.
Routt County Assessor Mike Kerrigan takes a different view, noting that the cost of providing services is going up just like – and sometimes because of – property values. Kerrigan said he views money as “energy” that fuels economies.
“We’re all in this together,” Kerrigan said. “Property tax is just a redistribution of your money and my money. In healthy economies, we share it a lot. : We participate in a community where we all need each other’s help.”
Where’s it going?
“I think it would be safe to say it surprised us,” Horizons Executive Director Susan Mizen said of the booming tax revenues her organization will see this year.
Mizen and other Horizons staff members held a meeting last week to discuss the issue in preparation for a future board meeting at which actual budget decisions will be made. While she recognizes the magnitude of the increase, Mizen said Horizons could certainly use the money.
“Money from the state has not been enough to meet needs in Routt County,” Mizen said. “We’re going to be able to do even more. : We know that we can make good use of it.”
Mizen will recommend to the Horizons board that funds focus primarily on its programs for children, families and adults. She anticipates being able to ask adults who are on a waiting list to participate in day programs. Mizen does not anticipate adding another Horizons group home in 2008, but said some of the money may be put to staffing current homes.
“Providing services to adults who need 24-hour care is a fairly big undertaking,” Mizen said. “Obviously, to do that, we need people, so the board plans to look at our compensation for support staff. We have the same workforce issues others in the community have.”
CMC Dean Kerry Hart also said some of the increased funds will likely go toward the college’s workforce, although CMC’s Alpine campus in Steamboat does not totally control those funds. Hart said money collected in the college’s six-county system goes into one pot and is redistributed. He said property values are making similar gains throughout the CMC system.
“It will help us to maintain the high quality that we currently enjoy,” said Hart, who noted the current financial crisis facing the state school system has been the subject of much debate at the Capitol in Denver. “One of the things I really appreciate about CMC is that we do have the resources to provide quality education. : We continue to keep tuition low while providing top-quality education.”
Chuck Wisecup is chief of the Oak Creek Fire Protection District, which will see its mill levy revenues increase from $3,079,499 in 2007 to $3,929,346 in 2008, a 28 percent jump. Wisecup said the money will go toward a number of uses, such as a new fire truck and debt financing for a new fire station in Stagecoach. Wisecup said he has a pretty good pulse on property values because he must sign off on building permits in South Routt and wasn’t too surprised by the increase.
“The big portion of our growth was Stagecoach,” Wisecup said.
Wisecup said the increased funds are sorely needed for a fire district with outdated equipment, only two-and-a-half full-time employees and burning demands.
“Our calls for service are increasing with the growth,” Wisecup said.
Wisecup said the fire district received only seven calls for service in January 2007. Through Jan. 30, 2008, the district received 30.
Bud Werner Memorial Library Director Chris Painter said the library might use its 34 percent increase in property tax revenues to pay off the bonds it issued for its expansion sooner, or to refinance its debt to reduce its mill levy. Painter rejected the notion that the library’s increase from $2,341,249 in property tax collected in 2007 to $3,130,796 in 2008 amounts to a windfall.
“That does not result in a windfall for the library,” Painter said. “But it does help for the long-term stability.”
Perhaps more than any other taxing program in Routt County, the Purchase of Development Rights Program is directly tied to the cost of land. The program compensates landowners for placing their property under conservation easements. Ron Roundtree, chairman of the PDR Advisory Board, said it makes perfect sense for the PDR program’s revenues to increase at the same pace as property values. The program’s tax revenues, collected countywide, rose 34 percent, from $1,219,370 in 2007 to $1,640,315 in 2008.
“It seems every project that comes in, the value of the land is higher,” Roundtree said. “This lets us stay in the game. : This allows us to keep pace with the escalation. It keeps us in the hunt.”
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