A group that reportedly includes two elected officials, as well as an ex-town manager, has been established in Basalt to advocate for the passage of ballot issue 3A, which would set the town’s property tax mill levy at 5.957.
The group is named Yes on 3A. Its slogan is “Moving Basalt forward.”
The election, slated for Nov. 5, is a direct result of Basalt having inadvertently, but illegally, collected property tax revenues over the course of about 10 years in violation of the citizen-generated Colorado’s Taxpayer Bill of Rights, known as TABOR, which was passed as an amendment to the Colorado Constitution in 1992.
Two years after TABOR was enacted, Basalt voters approved a property tax mill levy rate of 6.151. Almost immediately, given the increase of real estate values in town, that rate was lowered, finally bottoming out at 2.56 mills in 2010. As real estate values struggled to recover from the Great Recession, Basalt was forced to gradually raise the mill levy to meet its basic operating costs. By so doing, the town ran afoul of TABOR’s fine print.
Last winter, with a new finance director and a new town attorney on board, the Basalt town government announced the TABOR snafu. After respondents to a town survey indicated support for that course of action, the town government announced its intention to refund the property tax revenue illegally collected over the previous four years, as TABOR’s wording includes a statute of limitations that covers such transgressions.
The refund will apply only to people who still own property in Basalt. Those who sold their property over the past four years are out of luck. Checks are scheduled to be sent out this month.
In order to right the TABOR ship, the Basalt town government has placed the issue on the Nov. 5 ballot. Issue 3A asks that Basalt voters approve a permanent mill levy rate of 5.957, which is what it is for 2019.
If the election fails, the mill level rate will default to 2.56, its lowest point since Basalt’s 1994 election.
According to Basalt Town Manager Ryan Mahoney, a “no” vote will impact the town’s coffers to the tune of $700,000 a year. Property tax revenues make up about 15 percent of Basalt’s $7 million annual operating budget.
Yes on 3A was formed two weeks ago to try to supplement the town’s efforts to explain the mill levy ballot question, according to Yes on 3A member Bill Kane, who served as town manager for Basalt from 2009-2012.
“The town is hamstrung on how much they can do so as not to be construed as promoting the ballot issue,” Kane said. “Citizens can do it. We’re not an official nonprofit 501(c)(3). We’re a single-issue committee that exists from now to Nov. 5, then expires.”
Kane was referring to the Colorado Fair Campaign Practices Act, which, according to Mahoney, prohibits town governments from spending money on elections.
“That includes staff time,” Mahoney said. “We can answer questions, but that’s about it. Elected officials can lobby [on their own], however.”
Basalt Mayor Jacque Whitsitt and town council member Jenn Riffle are among Basalt elected officials reportedly involved with Yes on 3A.
Other reported members are Glenn Drummond, who, according to his LinkedIn profile, works at MatDog Repairs in Glenwood Springs; Sarah Bates, a sales rep for Black Diamond, according to her LinkedIn profile; and Charles Spickert, who used to serve on Eagle County’s Roaring Fork Valley Regional Planning Commission.
Bill Ray, who was hired to help get the last Roaring Fork Transportation Authority tax increase passed, is being retained by Yes on 3A to help with public contact, among other things.
“We have no official connection to the Basalt town government,” Kane stressed. “We intend to write letters to the editor and to help persuade journalists to get support for the measure. It’s certainly on our wish list to have a public meeting to explain this measure, though we do not have a date yet.
“I personally got involved because I think this whole issue is a shame,” he continued. “I felt we were deBruced back in 1994. When I was town manager, it was a non-issue to raise the mill levy because we all operated on the belief that the 5.9 mill cap was voter approved. Through whatever interpretation, we are now finding it was not done legally. So here we go. We want to fix what we were never aware was a deficiency in 1994. We’ll put out yard signs, urge people to vote ‘yes,’ do letters, then close up shop.”
Kane is very concerned about the impact a “no” vote would have on Basalt.
“We would lose $700,000 off the budget and municipal services, including contributions to nonprofits, would really be cut back,” he said. “I was there during the recession. It was a tough time, a very different dynamic. My concern is it would be a huge bite out of the town budget.
“The town’s got important, credible projects in public works, community policing and all the stuff the town is doing,” he continued. “It would be tough to take that much money out of the budget. Truth is, it’s a mill levy we’ve been operating on for quite a while. It would be a shame because of a technicality to have to go backwards.”
Yes on 3A’s newly established website — yes3abasalt.org — pulls no punches.
“Voting Yes on Issue 3A will allow the town of Basalt to maintain its existing level of operations and move forward with a transparent fiscal process,” the website states. “By approving 3A, Basalt voters will make certain that our town continues to provide the services that we depend on, such as police and public safety, fire and flood prevention, street repairs, snow plowing and park maintenance.
“Without passage of 3A, Basalt revenues would be significantly reduced, and that reduction would require the town to reduce or eliminate several critical services to balance its budget,” the site continues. “Those reductions might include services like police, street maintenance and recreation programs.”
According to Mahoney, the difference in property tax payment at the 5.957 rate compared to the 2.562 rate would be about $121 a year for a home valued at $500,000.
He added that, because the 2019 mill levy rate is already 5.957, property owners would not see a tax increase if 3A passes. But they would see a tax decrease if 3A is defeated.
“I would caution you to compare this number to the number we provided residents related to the refund because the refund amount reflects four years of refund with a varying mill rate,” Mahoney said. “The clear message that can be shared is that we are asking to keep the mill levy at its current rate so a homeowner will not actually see an increase on their tax bill reflecting this $121 amount.”
The amount of property tax over-collected is around $2.1 million.
The funds to repay property owners who were overcharged during the last four years will come from the proceeds of certificates of participation and will be included in the general fund. Essentially, Basalt is borrowing money to pay for this.
The annual payment will be approximately $250,000 per year for 10 years.
The town has budgeted about $50,000 for the administration of the refund process.
That means, when all is said and done, the whole deal will cost Basalt a bit more than $2.5 million.
Estimates at this point are that a house now valued at $1 million would receive a refund of about $1,000, while a business property valued at $1 million would receive about $4,000.
Kane understands that Basalt has seen its share of political turbulence the past couple years — including the ongoing TABOR controversy.
“There’s been enormous turmoil,” he said. “I think 3A, along with the Basalt Area Community Fund, in front of the public now hopefully will be perceived as calming measures. This is not more controversy. This is not a heated debate. I don’t think there’s organized opposition to this measure. I hope this is an example of something that is not divisive and can help the community come together.
“But I have to honestly concede, I don’t have my finger on the pulse of the town to the degree that I know if some of these past issues are going to overshadow this ballot question,” Kane continued. “I hope people will look at 3A for what it is and realize it really fixes a problem. It puts us on a path of stability. There’s no hidden agenda. I don’t know how all these past controversies will affect people’s view of this. Anytime you have a public vote of something that involves a tax, I think there is a statistical surety that some people will be opposed. I just think there’s a fixed percentage of the populace that will vote against it.”