How special taxing districts could reduce your property taxes amid $10 billion real value increase
The largest tax collectors locally — Steamboat Springs School District and Routt County — are TABOR limited, so how the dozens of special districts locally decide to set their mill levies will have the biggest impact on your property tax bill.
Editor's note: This story has been updated to clarify that Routt County is the second largest property tax collector in the county behind the Steamboat Springs School District.
The actual value of all property in Routt County is up nearly $10 billion following the 2023 reassessment, an increase of nearly 74% from the 2022 real value, according to data presented by Routt County Assessor Gary Peterson on Thursday.
Yes, that is billion with a B.
Property tax bills are not based on actual value though, they are based on assessed value, which is derived by applying assessment rates to that actual value. The assessed value is still up nearly $800 million across the county though, which is just over a 57% increase.
This does not mean property tax bills will increase by that same percentage though, as Routt County — the second largest tax collector locally — is TABOR limited and can only increase revenues by a measure of inflation plus local growth. Other entities like the Steamboat Springs School District, Town of Yampa, South Routt Cemetery District and Oak Creek Cemetery District are also still limited by Colorado’s Taxpayer’s Bill of Rights, and will need to lower their mill levies to limit the revenues they collect.
But most smaller taxing districts in Routt County — there are dozens of them — are not limited by TABOR anymore, meaning they are not limited in the amount of revenue they can collect. If they were to collect property taxes at the same mill levy that they did last year, they would collect increased revenue that is directly correlated to the increased assessed value of property in their district.
For the East Routt Library District (Bud Werner Memorial Library) specifically, which saw an increase in assessed value in its district of nearly 64%, this would amount to an increase in property tax revenue of more than $1.8 million. Those revenues represent a nearly 64% increase over the total $2.9 million the library district collected in property taxes last year.
The key word is “if” though. Taxing districts need to ask voters to increase mill levies, but they are able to lower those mill levies without a public vote, a move that would ease property taxes. Until earlier this year though, it was unclear in Colorado law whether those entities could lower mill levies one year and then bring them back to the voter-approved level the next without another public vote.
Senate Bill 23-108 clarified that, stating that if a taxing entity opted to lower their mill levy this year, they could bring it back up in future years without needing to get voter approval.
The Routt County Commissioners and Assessor Peterson hosted a meeting with leaders of a handful of these taxing districts on Thursday where they sought to inform them of their options as they consider how to set their mill levies.
“Our goal here or anytime isn’t to suggest to any taxing entity what they should do. We’re just here to let you know what you can do and what these numbers are,” said Commission Tim Corrigan.
Earlier this week, Commissioners met with the three groups who get funding from voter-approved mill levies that are controlled by the commissioners to discuss what they would do. These entities are the Purchase for Development Rights Program, Horizons and the Museum and Heritage fund.
“We didn’t tell them that we are going to lower their mill levy, we challenged them to … propose to us where their mill levies should be set,” Corrigan said. “If they believe that they should retain all of the additional revenue, just make that case to us so that we understand in our minds whether or not it is justified.”
Commissioner Sonja Macys has a slightly different opinion though, feeling that these voter-approved mill levies are different than the taxing districts at large.
“I have no doubt that there are going to be needs that are justifiable and we will likely look at them and say this makes sense or it doesn’t,” Macys said. “In my opinion, it has to be worthwhile. It has to be a meaningful savings to taxpayers, so that when we look at very small gains for the taxing entities I begin to question whether it is meaningful to the taxpayer.”
Peterson, whose name appears on the 29,000 property valuation notices sent out earlier this year, differed from the commissioners though, pushing for taxing entities to lower their mill levies and forgo the windfall in revenue that they could see.
“I am asking you, taxing authorities, to not take a windfall of revenue and ratchet down your mill levies, because I am the bad guy in the county for every property owner out there,” Peterson said. “I will take that heat.”
How does Proposition HH factor in?
In a flurry of arguably less-than-transparent action in the waning days of the legislative session, the General Assembly passed a measure that was billed as significant property tax relief if voters were to approve the question in November. That bill, SB 23-303, created Proposition HH.
Proposition HH, if it were approved, makes a number of changes to the property tax structure and to assessment rates. Peterson said he felt the assessment rate changes would not have much of an impact in Routt County if Prop. HH was to pass in November.
Another part of the ballot measure could have a more significant impact on property taxes though. If approved, it would limit the amount of revenue these smaller taxing entities collect to what is known as the TABOR growth factor, which is the same inflation plus new growth percentage that Routt County is limited to.
That isn’t a firm requirement though. If HH were to pass, each taxing entity is able to hold a public meeting where they could vote to collect revenues above that TABOR growth factor. As Peterson says, they just need to “take the heat.”
There are other changes in Prop. HH as well, which is why it is currently being challenged in the Colorado Supreme Court as an unconstitutional ballot question. Those bringing the suit, mainly conservative groups, argue that the question flouts Colorado’s single-subject rule.
Earlier this month, Colorado Public Radio reported that the bill would allow the state budget to grow faster than TABOR currently allows, would shrink income tax refunds (TABOR refunds) in future years and could lead to an increase in funding for schools. Based on CPR’s reporting, it would increase what the state could retain in 2024 by $167 million, but that grows to $2.2 billion by 2032.
(Here is the full story from CPR. The story notes that Gov. Jared Polis’ Administration would not sit down for an on-the-record interview with CPR about the fiscal impacts of Prop. HH and have not provided financial projections to show the full extent of Prop. HH’s impact on how tax dollars would be distributed in future years.)
Peterson, a Republican, said he felt the biggest impact of Prop. HH would be the changes to TABOR refunds.
“I think the biggest impact is the TABOR refunds on everybody. They say they need your TABOR refund to pay for these property tax reductions,” Peterson said. “That is not my wheelhouse, but the more I read about it, the more I don’t like that. That’s my opinion, not as an assessor, but as a citizen.”
What will local taxing entities do?
Local taxing entities now have a big decision ahead of them. They could choose to keep their mill levies where they are and collect the additional revenue, or they could lower them to ease the burden on taxpayers.
For almost all of these entities, they have not decided what they will do at this point. They do have time, as mill levies are not finalized until the end of the year. If Prop. HH passes, it would facilitate several changes to the property tax structure, so the measure allows these special districts some additional time to weigh their options.
But Colorado Mountain College, which has a 4.085 mill levy in a large portion of Routt County, has already decided they will not take the additional revenue. Matt Gianneschi, COO Chief of Staff at CMC, said they intend to limit their revenue collections to what they collected last year, plus a measure of inflation. This means they will collect just 5.7% more in revenue this year than they did last year. If they opted to keep their mill levy constant, the increase in revenue would have amounted to nearly $3 million, or 64% more.
“We have benefited from the generosity of the taxpayers for many years and we feel like we are a well-run organization and our finances are healthy,” Gianneschi said. “We have no need for additional revenue today. … For us it is really about predictability. I don’t care so much about total number of revenue that is coming in as long as I can see and I can manage against it.”
On the other side, Steve Warnke, board president of the North Routt Fire Protection District, said for them these revenue increases couldn’t have come at a better time. As North Routt is struggling to find volunteers, they are opting to transition to pay firefighters full-time.
“Some of the increases that I think we are going to be seeing will take us out of the woods a little bit to try to figure out how to pay for these people,” Warnke said. “I know it may not be popular among everybody, but I think even our taxpayers, residents, appreciate the fact that we are doing what we are doing because there was a time for probably about six months I was telling some of our district members, ‘do yourself a favor, if you are going to have a heart attack, don’t have it at night because we don’t have the staff.’”
Not every district will see the same boom either. While some entities are potentially looking at huge windfalls of additional revenue, the Hayden School District isn’t seeing the same increase.
Peterson’s numbers show that the assessed value in the district only increased by 16%. This is because while most properties saw significant value increases, the single largest property — Hayden Station — saw a decrease in value. Peterson said assessed value from the powerplant represented about 55% of the district’s collections last year. This could still change as the final valuation of the power plant, which is put together at the state level, could see more adjustments.
Ed Anderson, the district’s finance director, said he is projecting an additional $430,000 for the district, which amounts to a break-even budget, not a significant windfall of revenue.
The South Routt School District, which draws a significant amount of its tax revenue from Twentymile Coal Mine, is in a stronger position than Hayden. While the coal mine is seeing lower valuations, the residential increases, mainly in the Stagecoach area, are large enough to offset those decreases.
Taxpayers within the Steamboat Springs School District are set to see some of the smallest increases in property taxes, Peterson said. That is because both Routt County and the district are TABOR limited, so about 75% of the tax burden is limited to inflation plus new growth. (SSSD is the only school district in Colorado still subject to TABOR.)
“With those two ratcheting down (their mill levies), that’s a big relief,” Peterson said.