Assume, for a long painful moment, that the local assessors office has in fact correctly pegged the market value of your Pitkin County property, based on comparable real estate sales between July 2006 and June 2008.
Come on now, surely you remember that golden time long ago in December 2007 when Jeffrey Soffer paid $36.5 million for a regal Starwood house, helping to boost that year’s real estate sales tally to a neat $2.5 billion?
And you do remember, don’t you, when Russian tycoon Roman Abramovich paid $36.4 million for a home on Wildcat Ridge in Snowmass Village in April 2008?
But here you sit today, apparently still house rich at least, with a large property tax bill heading down the pike at you.
You can give some measure of thanks that your bill won’t be worse to Douglas Bruce of Colorado Springs, the man who wrote and successfully promoted the Taxpayer’s Bill of Rights, or TABOR, in 1992.
The act, now part of the state Constitution, requires that local governments and special taxing districts must lower their mill levy, or taxing rate, in response to an increase in property taxes.
TABOR is designed so that governments and districts do not enjoy a quiet tax hike just because property values go up, although there are provisions to allow for inflation and new development in a community.
So if you are upset about your bill, you can light a small candle to Mr. Bruce. At least 25 percent of the mill levies on a typical Aspenite’s bill will already have been forcefully reduced, which is a convenient time-saver for any angry taxpayer.
That TABOR-adjusted percentage can climb as high as 44 percent, depending on how the city of Aspen, which accounts for 18 percent of a city property tax bill, fixes its mill levy.
Sometimes the city leaves its mill levy fixed and then asks voters later if it can keep the “excess” revenue it has collected.
Of note is that the Aspen School District’s mill levy equals 22 percent of an Aspenite’s tax bill and questions about whether that mill levy is fixed or not quickly leads to complex and nuanced discussions about state funding for education. In any event, if you have an issue with the school’s mill levy, you are likely going to have to take it up with the state Legislature.
So when you are straining to read the fine print on your tax bill by that same candle you lit for Douglas Bruce, you will discern that some mill levies are firmly fixed in place from two years ago because local voters at various times, and for various noble and altruistic reasons, decided to “de-Bruce,” or make exempt from TABOR, certain local mill levies.
If residential property values go up, say 38 percent, as they did in Pitkin County during the mid-2006 to mid-2008 valuation period, so will the tax revenues tied to a de-Bruced mill levy.
Which, depending on where you sit, is either an outrageous and sneaky tax hike foisted off on an unknowing public, or the generous will of anti-Bruce voters being perfectly expressed.
Colorado Mountain College
The de-Bruced mill levy in Pitkin County that takes in the most money belongs to Colorado Mountain College.
That 3.997 mill levy was de-Bruced in 2000 so that CMC could “use all of the revenues it receives from property taxes for educational purposes,” according to official election information prepared by Pitkin County.
In 2001, the first year that the mill levy was collected, the property in Pitkin County was valued at a humble $1.4 billion. By 2009, the value of private property had increased to $2.8 billion.
As a result of that neat doubling in value, CMC’s cumulative increase in revenue collection went up 99 percent during the same time period, according to an analysis by Pitkin County Treasurer Tom Oken.
Some government officials, including the county assessor and Pitkin County Commissioner Rachel Richards, have suggested that the elected board members who control local taxing districts and governments should strongly consider temporarily lowering their de-Bruced mill levies, even though they don’t have to.
Several times this spring, Richards has called for a summit meeting of the districts and the governments to discuss the lowering of de-Bruced mill levies, but no date has yet been set and, many times, groups of elected officials don’t warm to advice from other groups of elected officials.
Meanwhile, time and taxes march on.
On Monday the CMC board unanimously approved its $63 million budget for its fiscal year, which runs from July 2009 to June 2010. The budget assumes a fixed mill levy of 3.997 and $11 million from Pitkin County, up from $7.7 million during its 2006-2007 budget.
The elected CMC board members cited several reasons for keeping the mill levy fixed, including a likely downturn in property values during the next valuation period, unstable state funding, and their attorney’s warning that if they temporarily lowered their mill levy, they might not be able to raise it back up in the face of a legal challenge from an angry taxpayer.
Now, CMC won’t know for certain how much tax revenue it will definitely receive until August, after most of the approximately 4,500 valuation protests that were filed this year are settled by the assessors office or the county commissioners.
Then, in December, the CMC board must formally inform the county treasurer what its mill levy for the 2009 tax bills is going to be.
Heather Rousseau/Aspen Daily News
The CMC Aspen campus is pictured on a recent rainy afternoon. The CMC board of trustees plans on keeping its de-Bruced mill levy fixed in place this year. The Aspen campus was built in large part with property tax revenue.
As Doris Dewton, president of the CMC trustees said Monday of the CMC mill levy, “At the moment, for our budget forecasting purposes, we are continuing it at 3.997. But it would be up to the people on the board in December to determine that again, and the budget could be adjusted.”
(Special bulletin for Mr. and Mrs. Angry Taxpayer: the CMC board election is in November and four of seven seats will in be play.)Open Space and Trails
The next largest de-Bruced mill levy belongs to Pitkin County Open Space and Trails, whose core mission is to protect valuable land in the county from development.
The open space mill levy of 3.760 was originally passed in 1989 and first de-Bruced in 1996. In 2006, voters de-Bruced the mill levy for another 10 years.
“The intention of the voters was based on the desire to give us leverage in whatever property market we are in,” said Dale Will, the county’s open space and trails director. “Otherwise our seat at the table is gradually eroding.”
At least if the market is hot. And since 1989, the open space and trails board has found itself in a slightly surreal property market, with some of the highest land values in the country.
In 2008, the open space mill levy brought in $10.4 million in tax revenue.
Since the first year of de-Bruced tax collections, when property in Pitkin County was “only” worth $970 million, Oken calculated that the revenue to the open space program has seen a cumulative increase of 187 percent.
The appointed members of the open space board recommend where to spend the open space money and the county commissioners approve or deny the board’s recommendations, but usually they approve.
However, it is the county commissioners who are responsible for setting the open space mill levy in December, which sets up an interesting question: Will the county commissioners, who have suggested that other boards do so, vote to temporarily lower a de-Bruced mill levy that funds a popular local program?
“We’re going to have to take a hard look at our open space fund,” Commissioner Rachel Richards said at a recent meeting when mill levies were discussed. At the same meeting, Commissioner Jack Hatfield said, “We should lower our mill levies everywhere we can.”
When such a discussion gets scheduled on the commissioners’ agenda later this year, Dale Will might well argue that when it comes to buying land for open space, the current real estate market isn’t really all that soft, it is just frozen, as he did during a recent interview.
“We haven’t seen market value on vacant land coming down,” he said. “What we’ve seen is a decrease in the value of sales. It is not clear to me or the appraisers that I talk to that the undeveloped land prices are coming down.”
And then there is the lag effect.
“With a de-Bruced mill levy, we are essentially two years behind when the values go up,” Will said. “We’ve been suffering during the recent boom that started in 2005 or 2006. When the market took off, we were stuck with assessments that were two years out of date.”
To which Commissioner Michael Owsley might then tell Will, as he did during a recent open space and trails board meeting, “If people could take that last vote back, they would,” referring to the 2006 de-Brucing vote for the open space mill levy.
For now, consider it an open question.The school district
The CMC mill levy and the open space and trails mill levy are the two elephants on the list of de-Bruced mill levies in Pitkin County, but combined they still bring in less tax revenue than the Aspen School District does.
The school district collected $23.8 million from property tax payers in Pitkin County in 2008 on a combined mill levy of 9.355.
When it comes to mill levies and property taxes though, the school district is unique among local districts and governments and it is not correct to say that the school’s primary mill levy is de-Bruced.
Its ultimate mill levy is a combination of six different mill levies. The largest of those, at 4.836, is labeled the “base finance act” and is set by state officials and not by the locally elected officials on the Aspen board of education.
According to school board member and attorney Fred Pierce, the state essentially counts the number of students in a district, estimates how much it costs to educate a student in that district, looks at the most recent valuation of the real property in the district and then says, “OK, here’s your mill levy.”
It’s undoubtedly more complicated than that, but the local school board members are quick to point to the state when the subject of reducing its mill levy comes up.
Diana Sirko, the district superintendent, is also quick to say that the district has enjoyed solid support in the community for various tax increases over the years, including November’s strong vote to approve a $12 million measure for teacher housing.
And Sirko recently told the county commissioners that the school district spends 66 percent of every dollar it receives in the classroom (and not in areas like transportation or the cafeteria), which is the highest percentage in the state.
Feeling any better yet?
Don’t fret dear taxpayer, there are some districts with de-Bruced mill levies that are leaning toward a temporary reduction this year, including Aspen Valley Hospital, the Aspen Fire Protection District, the Basalt Rural Fire Protection District and the Aspen Historic District.
But more on the mill levies in those districts, and our local governments, next time.
For now, to soothe your tax-addled nerves, might we suggest enrolling in a class at CMC, taking a walk through some protected open space, or admiring the recently completed Aspen Middle School building?