A new third party in Colorado and a look at how your property taxes are calculated: a BIG problem is looming in Colorado.
It’s official: Colorado has a new minority party.
It's official, Colorado has a new party, the "No Labels" party.
Per the article below, they got enough signatures to become an official minor political party in the state.
They can nominate candidates directly to the ballot and do not have to have candidates petition on.
So, if you've considered a change, now you've got another option (among the American Constitution Party, Approval Voting Party, Green Party of Colorado, the Libertarian Party of Colorado and the Unity Party of Colorado).
Of course, you still have the option of being an independent and joining other forward thinkers such as *cough* yours truly.
https://www.coloradopolitics.com/elections/no-labels-becomes-colorados-newest-political-party/article_45a0a9e8-9d0a-11ed-8301-ebb1fc4075d6.html
An in-depth look at property taxes in Colorado: today’s installments cover how your taxes are calculated and why a BIG problem is looming.
Property taxes and how they're calculated may not be fun, but they have an immediate impact on your wallet--and you have a chance to speak up to give yourself some relief.
This is part 1 of 3. In this part, I'll outline how property taxes work. In part 2, I'll outline the problem. In part 3, I'll outline a couple bills that should help the problem that you can advocate on.
**I would like to thank a friend of mine (won't by name since I didn't get permission ahead of time) for her help on this series--I wouldn't have been able to uncoil all the TABOR info without it!
I started by listening to the interview between Ross Kaminsky and Rep Frizell (linked first below). They were talking about property taxes and the huge jump they're likely to take this year. It's not going to be a pretty picture and this will affect us all: rent or own, these increased taxes eventually end up hitting you.
Let me back up and provide a quick primer on how your property taxes are collected to help you understand things that come later.
Here is how your property tax works (I'm going to use a phony house value, but I looked up my most recent property tax statement and the percentages are actual Logan County values).
Let's say that my home is worth an actual value of $100,000. This is for land and building both.
To calculate your taxes, the county takes your home's value and figures out how much of that value to assess on. For everyone in the state that is 6.96%. So, I pay property taxes on
$100,000 x 0.0696 = $6960
The amount I pay in property tax is this $6960 (assessed value) multiplied by the mill levy for my county (and any other districts that assess property taxes). They call it a mill levy because it is given as a number in thousandths (mill is short for milli--prefix for thousand--think "millipede").
Where I live in Logan County the mill levy is 84.253 mils or 0.084253% (i.e. 84.253 thousandths)
So my property taxes are $6960 x 0.084253 = $586.40
So far so good I hope. Now, some more important prerequisite material.
1. Property values are calculated every two years (in odd years), so your property values are going to be recalculated this year. That affects the value of your property. For example, let's say I added on to my little Palace on the Plains and the house's value went up $25000. That means my property is now worth $125000. They'll be assessing on that instead of $100,000 in the future.
2. The assessment rate (the 6.96% above in my example) is controlled by the General Assembly. This is a discount from the previous rate of 7.15% as the result of a bill passed in 2021 (see the second link below). The discounts are (see screenshot 1--from the bill's fiscal note) are temporary however. They will expire in the property tax year 2023.
3. The mill levy rate is mainly controlled by local entities.
4. TABOR, the 5.5% rule and property tax.
This one is pretty complicated and so will be the last of our pre-req's
--TABOR applies to property taxes too. Your county (or any other special districts), unless you gave permission earlier, has to ask your permission to impose any new property taxes.
--TABOR limits the revenue that your taxing authorities can collect. If they collect too much, they must rebate your money. TABOR doesn't specify the rebate mechanism, however, so this may vary. One example of how it's done is a lower property tax bill in the future. Look on your property tax statement for something like "TABOR refund" if you're curious whether you've ever gotten one.
--Lastly, and this one was completely new to me, is the 5.5% property tax revenue limit. That's in the third link below. This is completely separate from TABOR limits. It's a law and not an amendment and it says that an authority that can levy a property tax cannot (unless voters waive it) collect more than 5.5% more revenue than it did last year. Note, as it shows in screenshot 2, this refers to the entire district revenue, not that on any one single taxpayer.
For example, let's say that Logan county collected a total of $100 TOTAL in tax revenue last year. This year they cannot collect more than $105.50 in TOTAL tax revenue.
That is how property tax is levied, and some of the rules of the game. In the next post, we'll talk about the looming problem.
https://koacolorado.iheart.com/featured/ross-kaminsky/content/2023-01-25-state-rep-lisa-frizell-and-the-potential-disaster-of-property-tax-bills/
https://leg.colorado.gov/bills/sb21-293
https://cdola.colorado.gov/55-property-tax-revenue-limit#:~:text=What%20is%20the%20statutory%20%E2%80%9C5.5,government%20may%20collect%20each%20year.
Property taxes and how they're calculated may not be fun, but they have an immediate impact on your wallet--and you have a chance to speak up to give yourself some relief.
This is part 2 of 3. In this part, I'll outline the looming financial problems that we're likely to face.
Part 3 of 3 will be potential solutions and that'll be tomorrow.
In the previous post, I discussed some of the rules behind property taxes. Let's look at the looming problem now.
The problem comes down to the tremendous inflation in property values here in Colorado, citizens voting out the Gallagher Amendment (Amendment B in 2020, see the first link below for a Ballotpedia article if you've forgotten), the "reset" in the property tax valuation rate that was temporarily reduced in SB21-293 (second link below), and the gradual "De-Brucing"--eliminating of TABOR and 5.5% protections--of local governments.
Let me illustrate with some numbers. These are not reflective of my actual house, but have been kept "round" to make things easy.
Let's say that when I bought my house it was worth $100,000. Thanks to this state's attractiveness and inflation, my house is now worth $175,000, a mere 2 years later.
So, originally, my property taxes were, assuming an assessment rate of 6.96% and a mill rate of 85 (if you didn't read post 1, now would be a good time):
100,000 x 0.0696 = $6960 in assessed value x 0.085% taxes = $591.60 in taxes owed.
With my property's new value, I'll recalculate what I owe this year
175,000 x 0.06960 = $12180 in assessed value x $1035.30 in taxes owed.
I owe $443.70 more this year!
In the future when the lower assessment rate resets to 7.15% from 6.96%, I'll owe even more, an extra $28.26 over the already big $1035.30!
Here's where things that might normally have protected you against jumps like this have failed.
1. in the past, we had the Gallagher amendment which controlled the ratios of property taxes on residential and commercial property taxes, keeping residential taxes low (admittedly at the expense of commercial).
2. TABOR contained a protective mechanism which capped the amount of revenue that property tax-levying authorities could charge. Just like with income tax, if they collected too much (beyond the formula which defines what "too much" is) they would have had to rebate that money somehow, often through a tax cut. With a number of counties having voted away their TABOR protections, that rebate will not happen.
With horrendously bloated property values, the revenue collected would have almost certainly hit the TABOR cap and you'd have had some back. If you're in a county or city that voted away those TABOR revenue limits, you won't.
3. The 5.5% limit (see previous post) would have also helped--again, provided it wasn't voted away.
A natural question to ask is whether your county has waived any of the protections against rampant property tax jumps. It's one I asked myself.
The friend I thanked in the previous post was most helpful in this regard too. Again, I am grateful for her help.
To check on what your county has done re. TABOR, click the third link below and then go to the "Tracking TABOR Table" link (see screenshot 1 for what it looks like). Click on that link and download the table. It will give you a look at all that has happened in your county re. TABOR from 1993 to 2022.
I put a copy of the Logan County entry in screenshot 2. From that you can see that you'll get a glimpse of the various ballot measures that have been proposed to keep revenue above TABOR limits. Note that not all relate to property tax.
Next, go to the fourth link below and you'll see all the agencies that levy property tax by county and whether or not those agencies have been able to keep more than the 5.5% increase. If they have, the agency will be marked "waived" under the 2022 and 2023 limit. If not, there will be a link to their tax revenue report.
**Note, like any good government-run site, the organization on this page is atrocious. They are listed alphabetically and not by county. The list is not huge, but you'll have to scroll down and look row by row to find your county. I.e. not all the "Logans" are next to each other.
As before (see screenshot 3) I picked a few from Logan County to show you.
Go and give your county a look.
Last thing. If you say, "Hey, I want my TABOR back!" I don't blame you. I wondered if such a thing was possible.
I have some feelers out there about the possibility of running a local initiative to try and get those TABOR and 5.5% limits back in. I'll update as I hear.
See you in part 3 tomorrow where we'll talk fixes (at least temporary ones until we can come up with a better plan than what's above!)
https://ballotpedia.org/Colorado_Amendment_B,_Gallagher_Amendment_Repeal_and_Property_Tax_Assessment_Rates_Measure_(2020)
https://leg.colorado.gov/bills/sb21-293
https://ccionline.org/research/tabor-resources/
https://dola.colorado.gov/lgis/dlg53EntityAlpha.jsf;jsessionid=TFV78EBeNm1rNlizltjaL5aNOSDY1eMSzY4ZH4gK.dolaapp12?alpha=L