Skyrocketing Property Taxes in 2023

Colorado
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Residential property tax is the product of three numbers:

  • The assessed value of your home
  • The assessment rate and
  • The total millage rate (mill levy).

The assessed value of the home is determined by the County Assessor, the assessment rate is set by the State of Colorado, and the mill levy is set by the County taxing authorities (schools, hospital, library, fire department, etc.).

Consider the property taxes for a house assessed at $500,000 in 2022. The State of Colorado’s assessment rate for 2022 was 7.15%. Assume an 80 total mill levy.

$500,000 * 0.0715 * (80/1000) = $2,860

Along comes 2023 and the assessed value of the home has increased by 50% to $750,000. The legislature has lowered the assessment rate in 2023 to 6.785%. They also provided a temporary $15,000 reduction in the assessed value. The 2023 property taxes are

($750,000 - $15,000) * 0.06785 * (80/1000) = $3,990

an increase of $1,130 from 2022.

The Polis proposition HH, on November’s ballot, would increase the temporary reduction to $40,000 and lower the assessment rate to 6.7%. The property taxes under proposition HH are

($750,000 - $40,000) * 0.067 * (80/1000) = $3,806

an increase of $946 from 2022.

But here’s the catch! Under proposition HH, the difference between $1,130 - $946 = $184 would be taken out of the state’s TABOR surplus (backfill). You pay less in property tax, but the taxing authorities (schools, hospital, library) still get the benefit of increased property values (up to the TABOR limit). You pay a little less in property tax, but you give up your TABOR refund forever.

The other variables are fixed. The State of Colorado assessment rate is set by the legislature, constitutional amendment, or a referendum. In 2007, the legislature, under Bill Ritter, froze mill levy rates to prevent them from being lowered. In 2020, Colorado voters shot themselves in the foot by repealing the Gallagher Amendment, which had capped property taxes for both residential and commercial property.

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Skyrocketing property taxes will effect homeowner AND renters, because landlords will pass the higher taxes to their renters.

Proposition HH lowers the property tax a little, but steals all of your TABOR refunds.

Fiscal conservative group Advance Colorado is mulling whether to move forward with a separate ballot initiative proposing a hard 3% cap on property-tax assessment increases, setting up a potential showdown pitting Prop HH against its proposal.

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Menter: Governor Polis knows best

Menter: Governor Polis knows best | Opinion | aspendailynews.com

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The lawsuit alleges the bill behind the measure violates the state constitution’s single-subject rule for legislation and clear intent provisions.

“All of the stuff in there shows this is multiple subjects,” Michael Fields, with Advance Colorado, said. “We’re talking about TABOR refunds going to education, we’re talking about money going to renters, we’re talking about long-term changes to TABOR formula, and we’re talking about limited property tax relief in the same measure. They’re clearly trying to pair something that is unpopular with something that is popular to pass it.”

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Polis has been trying to get rid of Tabor since he got in. Not surprised.

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Legislature lies on the ballot, again | CALDARA | Opinion | coloradopolitics.com

There are two old axioms that perfectly fit the property tax rip-off going on right now in Colorado.

The first, “Fool me once, shame on you. Fool me twice, shame on me.”

That’s because voters got conned into repealing the Gallagher Amendment two years ago, realizing only now our property taxes are going through the roof because of it. If they vote for Prop HH this fall, we’ll lose our TABOR refunds forever, yes forever, and then, “shame on me.

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Record numbers protesting property tax valuations. More than 7,000 appeals in Eagle County. Garfield County valuations drop $23 million.

Here’s several articles from local papers:

Colorado Politics

Vail Daily

Post Independent

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Man in Colorado appealed his increased property valuation. The county assessor then raised it by another $300K | 9news.com

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Yikes!
I hear they can go back in time, increase your valuation for previous years, and charge you for the increased taxes.

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Costilla County residents worry massive property tax jump will leave them homeless.

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1,800 property tax appeals were filed by Chaffee County property owners.

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Prop HH is a lose-lose for Colorado

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Now the IRS wants to tax as income when your own money which was overtaxed
is returned to you as a TABOR Refund:

New IRS guidance would tax TABOR refunds (denver7.com)

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This is the tragedy of modern life.

How did we get here?

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Proposition HH in 40 seconds.

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Proposition HH aside, it is still possible to lower your property taxes by lobbying Chaffee County (CC) for lower mill levies.

The key to understanding property tax reduction in Chaffee County lies in the concept of mill levies. Mill levies are the total of all mill levies approved for each taxing entity a property is in, and they are set by taxing authorities in December at the end of each taxing year. Property owners can access the previous year’s mill levies on the Chaffee County Assessor’s website, which is a valuable resource for estimating their tax liabilities.

However, it’s important to note that the tax estimate provided in this year’s Notice of Valuation is just an approximation for tax planning. The final tax liabilities for property owners will not be determined until the end of 2023 when taxes, such as mill levies, are set by each taxing authority. This means there is still room for homeowners to influence the final tax burden on their properties.

One encouraging development is that Colorado Mountain College has already taken proactive steps to reduce its mill levy. They have committed to keeping revenue growth at 5.7%, which aligns with the inflation rate. This demonstrates that certain taxing entities are open to adjusting their mill levies to maintain a fair balance between funding needs and taxpayer affordability.

Regarding the school district mill levy, there is some debate. While some argue that it cannot be changed, others suggest that it can be lowered if it exceeds 27 mills. This presents an opportunity for property owners to engage with the school district and explore the possibility of reducing the mill levy, especially if it currently contributes significantly to their overall property tax burden.

It’s worth noting that the composition of your total mill levy is vital information. If 56% of your mill levy is attributed to the school district and the remaining 44% to other entities (as mine is), this breakdown highlights the significance of engaging with the school district regarding potential reductions.

Property owners in Chaffee County can still influence their property tax liabilities by actively engaging with taxing authorities, advocating for lower mill levies, and taking advantage of potential reductions offered by certain institutions like Colorado Mountain College. Understanding the components of your mill levy and collaborating with relevant stakeholders can help in the pursuit of lower property taxes.

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Here’s some further reading about mill levies:

In each Colorado local government, there are elected members. Those local elected representatives set and vote on the mill levy for their respective districts in October or November each year. When the elected bodies meet to set the mill rate, they take public comment. I would suggest reaching out to your elected representatives before the meeting. After the body votes, they notify the county assessor of the tax rate by December 15, 2023 and that’s what gets charged on the January 2024 property tax bill.

“Under Colorado statute, the county itself and all taxing entities have the authority to reduce, as a temporary measure, the mill levies,” he said. “As an alternative, what you can do is calculate how much revenue you need based upon the budget, reduce the overall mill levies to meet that … and the next year, the figures can be re-evaluated.

https://www.garfield-county.com/news/county-mulls-options-for-property-tax-relief/

Mill levies are local and may be lowered (other than for schools — which are locked by state statute). This is the local solution to rising values and impending property tax increases.