Editor’s note: This is an open letter written by the Elbert County commissioners.
Property taxes. They are surely a concern. Last week, “Notices of Value” arrived in our mailboxes. Across Elbert County, the median increase in home values is 35%. Naturally citizens want to know how this will affect property taxes. At a time when the rising cost of living has left many struggling to cover their monthly bills, many are understandably concerned about their ability to stay in their homes. As your commissioners, we recognize that since property taxes are local — the fix must be local too.
To address the issue, it is important to understand the factors that impact your residential property tax bill. Your taxes are calculated by multiplying your home’s “value” by the “assessment rate” and then by the sum of “mill levies” assigned by the various taxing entities that serve you. These factors are explained in more detail below:
Value — This is the price your home would bring on the open market. For the notice you just received, that value was determined by the county assessor based on comparable sales in the vicinity of your home as adjusted to a “sale” date of June 30, 2022. This date is set in statue and for this re-evaluation period coincided with the peak of the real estate market.
Assessed Value — This is an adjusted value determined by the Colorado General Assembly based on a percentage (assessment rate) of the actual valuation. In past re-evaluation years, the Gallagher Amendment to the Colorado Constitution acted to reduce the assessment rate. In the years Gallagher was in effect (1986-2020), assessment rates automatically lowered from 21% to 7.15%, preventing sharp increases in property taxes as home prices escalated in Colorado. In 2020, the legislature referred a measure to the ballot and voters rescinded Gallagher. This vote removed the protections against dramatic assessed value increases that are now upon us. Last year, the legislature reduced the assessment rate to 6.95%, a further temporary reduction was made to the current 6.75%. Another 0.05% was proposed in this session (but is part of a measure referred to the November ballot — it will not be enacted if the measure fails).
Mill Levies — Each taxing entity (county, towns, school districts, fire districts, metro districts, parks and rec districts, library districts, etc.) listed on your tax bill has an established number of mills. These mills, in most cases, were proposed by the taxing entities and approved by the voters. TABOR (the Taxpayer’s Bill of Rights) prevents increasing mills without a vote of the people, but downward adjustment is within the authority of local government boards (excepting school district operating mills). The sum of each of the taxing entities mills is your total mill levy. One mill is equal to $1 of property tax for every $1,000 of assessed value.
To summarize the factors above, the real estate market drives local property values. Market value can be recognized but cannot be changed. Assessed values are driven by assessment rates set by the legislature, must be uniform across the entire state, and may not be adjusted locally. Mill levies are local and may be lowered (other than for schools — which are locked by state statute). This provides an opportunity if all taxing entities work together to provide some relief to the citizens we serve.
SB23-108 Allowing Temporary Reductions In Property Tax Due, a measure passed in the final hours of this legislative session and strongly supported by commissioners throughout the state, provides taxing entities clear authority to float mill levies as needed so long as they don’t exceed what voters approved. It awaits the governor’s signature.
Because we do have the authority to act, and the citizens we serve are facing steep property tax increase that is well above the rate of inflation, the Board of County Commissioners has determined we must act and hope to do so in coordination with all county taxing entities to reduce the total mill rates that impact property owners.
Each of the 51 taxing entities will soon receive an invitation to meet in mid-June at the Elbert County fairgrounds. The Board of County Commissioners will host this meeting with the goal of reaching a mutual agreement to provide property tax relief to our citizens.
Elbert County Board of County Commissioners
Chris Richardson, District 1 (Chairman)
Dallas Schroeder, District 2
Grant Thayer, District 3
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