After a bruising, losing battle over Proposition HH, a breakneck special session and a public plea from Gov. Jared Polis for local governments to lower their property tax rates, further relief appears to be a trickle more than a torrent for Coloradans.
Few local officials have taken up Polis’ request so far, including in metro Denver. And Douglas County, which separately had pursued a 4% across-the-board cut to residential property values, was rebuffed Monday when a unanimous state board rejected the move, citing fairness and the impact on other taxing entities, including schools.
The decision added a crosscurrent to the larger suggestion by Polis: That the state’s hundreds of taxing districts voluntarily take a smaller piece of the property tax pie by temporarily reducing their mill levies. Those are the tax rates used to calculate tax bills, and they will be finalized as the budget season wraps up in coming weeks. The mill levies don’t need to be certified until early January.
The mill levy is a key factor in the property tax calculation — and with historic increases in property assessments this year, owners face a corresponding spike in their tax bills. The legislature and Polis pared back the increase in a special session last month but warned they could only do so much without hamstringing the local governments that rely on property taxes.
Local taxing authorities were left with a choice: Lower tax rates for sticker-shocked residents or hold onto their revenue after years of pandemic- and inflation-fueled uncertainty.
“We passed mill levy overrides — why would we back off what we told our communities we would do?” said Bret Miles, head of the Colorado Association of School Executives.
He was summarizing the feeling among school districts, which received some 51% of the $12.8 billion in property taxes paid statewide last year, according to a state report. Of the rest, county governments received nearly 23%, special districts (including library, sanitation and fire districts) got 20.5% and cities pocketed 4.6%.
Polis, in late November, penned a letter to all local government board chairs. In a guest column, he pitched his request to lower mill levies as “a huge opportunity and responsibility to act in the upcoming weeks to help reduce the cost of living for Coloradans.”
A recent state law allows local taxing authorities to temporarily reduce their mill levies without threatening their ability to restore their rates in the future.
But local hiring crunches, deferred maintenance, programs approved by local voters and an uneven distribution of those spiking property values — which averaged about 40% at the median statewide — leave plenty of disincentive for local governments.
Property taxes tend to be the most local of taxes: Collected locally and spent locally, all for local needs. The state has a role in setting the assessment rate but doesn’t directly control mill levies.
Some taxing districts are still evaluating their mill levies, The Denver Post found. The Colorado Department of Local Affairs, which certifies local taxing districts’ mill levies, doesn’t yet have a comprehensive look available since those aren’t due until next month.
The governor’s office declined to comment for this story, but Polis recently lauded Colorado Mountain College’s board for an earlier decision to reduce its mill levy to keep budget growth closer to inflation.
“I applaud Colorado Mountain College’s special district for providing community members with property tax relief,” he said in late November. “I encourage other local districts to follow their lead.”
Some cut rates, while Douglas County’s relief attempt fails
A handful of Colorado cities, towns and counties have made their own moves to provide property tax relief — however modest — to homeowners.
Last week, Garfield County on the Western Slope approved a one-year reduction in its mill levy, which the county characterizes as a tax credit. Commissioner John Martin cautioned in a recent news release that the credit “is for the county alone and not for other (taxing) districts” in Garfield County.
That means its impact for the average homeowner is limited. The same goes for Summit County, which this week is set to consider approving a 4.4% reduction to mill levies as part of its 2024 budget-setting process.
The mountain resort county has some of the most expensive housing in the state. Average residential values in the county have jumped more than 63% from 2021, according to state projections.
Given that there are 42 taxing entities in Summit County and the county’s general fund takes in around $17 million of $150 million in total property tax revenue headed into government coffers, the proposed relief is nominal. For a $1 million home, the one-year estimated savings as a result of the county’s potential temporary mill levy cut is just $22.
“If we were really going to create significant savings for taxpayers, we’d have to have schools and other (taxing) entities doing the same thing,” Commissioner Tamara Pogue said, adding that every bit counts. “We want to do whatever we can to help with affordability in Summit County.”
The 4.4% mill levy cut, she said, is all Summit County can do to ease the property tax burden “without making deep cuts to services in the county.” It also must guard against the chance values will drop in the next recession.
In September, Republican-led Douglas County opted for a unique approach to cut property taxes: Reducing assessments for all residences. It would have cut values by about $4 billion total and, the county estimated, would have saved property owners an average of about $223 on their 2024 tax bills, according to projections made before lawmakers’ special session.
“Residential property owners in Douglas County, facing a nearly 50% property tax increase, the highest in the Denver metro, demanded we act within our power as a board, to provide relief,” the Board of Commissioners said in a statement to The Post.
But the move failed at a hearing by the State Board of Equalization on Monday. That board is aimed at ensuring fair assessment — and its members disagreed with Douglas County officials’ view of the fairness of their move.
“While I’m not questioning anyone’s integrity, I think it’s important to note that a move like this, with the goal of reducing property taxes … is not our primary role,” said Colorado House Speaker Julie McCluskie, who serves on the state board, said of its function.
Sen. Chris Hansen, a Denver Democrat who also sits on the board, noted that Douglas County’s decision to cut values would have broader impact, leaving the local school board with a hole of about $8 million that the state then would need to step in to fill.
Several firefighters and local fire board members also spoke up during the hearing, arguing the county’s reduction would hurt their funding and put cross-county neighbors, who otherwise share the fire district, at odds.
The county’s commissioners said in a statement Monday night that they planned to challenge the decision.
Local needs, voters’ decisions are factors for some
Garfield, Summit and Douglas counties’ efforts have stood out — but many more local districts have not made public moves to reduce their mill levies.
Colorado Counties Inc., the Colorado Special District Association, the Colorado Association of School Executives and the Colorado Municipal League aren’t directly tracking where their members are landing on the mill levy question, but none said they had detected a widespread rush to tamp down on local collections.
“We had the full range of reaction, all the way from districts saying ‘We’re working with communities, we got it’ — and then people questioning if (state officials) understood how hard we’re trying to work to keep up with competitive salaries for our people,” said Miles, CASE’s executive director.
Meanwhile, some resort communities have seen such drastic increases in property values that they’re essentially self-funding local services with minimal help from the state.
Others are responding to local needs. Voters in Brighton-based School District 27J, for example, just raised its mill levy in 2022 specifically for staff salary increases and school resource officers, the first such increase in decades, according to Chalkbeat Colorado.
Why, Miles asked, would the board there turn around and give that money back?
Not every mill is equal. A densely populated community with soaring property values can squeeze more money from a small increase in its overall mill levy than a sprawling rural community with stagnant values can by seeking a big increase.
In southeastern Colorado, Kiowa County has one of highest mill levies in the state — and one of the smallest budgets. The county’s total assessed value of about $39.6 million is the lowest in the state. By comparison, 18 more highly populated counties measured their assessed values in the billions of dollars, according to the state’s 2022 annual report on property taxes, the most recent available.
“If you look at our annual tax revenue and our budget you will see that we have so little other areas of revenue that it is not feasible to cut property taxes,” Kiowa County administrator Tina Adamson said in an email.
The three Republican county commissioners responded to Polis’ call to reduce property taxes with worry that a cut to their mill levy would undermine the small county’s ability to provide required services. While praising Polis’ concern for Coloradans’ tax burdens, they also asked him to step away from local affairs — especially after they saw the shellacking voters gave to Proposition HH, state Democrats’ bid in the Nov. 7 election to deliver tax relief while also reducing state tax refunds.
“We would respectfully request you accept the vote of the people and respect the democratic process in which this country was built on!” the commissioners wrote in a letter to the governor. “We unanimously decline your proposal to undermine the voters of Colorado and put in place changes that could affect their ability to obtain much needed services in Kiowa County.”
At the municipal level, the impact of mill levy reductions amounts to even less than what counties can do. That’s because cities and towns get the bulk of their revenues from sales tax revenues, not property taxes.
Even so, the Northern Infrastructure General Improvement District in Commerce City cut its mill levy next year from 14 mills to 8 mills in October, with each mill representing $1 of tax per $1,000 in assessed value.
The district is responsible for laying down roads and other infrastructure in the northern part of the Adams County city. The move, which follows a similar 6-mill reduction in the district last year, is estimated to save homeowners living in that part of the city about $40 per $100,000 of value on a single-family home.
City spokesman Travis Huntington said the recent run-up in home values statewide was “the primary motivating force” for the city council, which acts as the general improvement district’s board, to pull the trigger on the cut.
“We understand and do feel peoples’ pain, and we hear it,” he said.
At least two other Front Range cities, Colorado Springs and Castle Rock, have reduced their mill levies slightly for the coming year. But those decisions were required by state and local tax restrictions, in either case — and not made in response to the governor’s public plea.
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