Tax Increase “Sticker Shock” Update

Property Tax Word With Coin In Glass Jar and graph up. Financial Concept

Community Meeting Set to Discuss Skyrocketing  Property Value Hikes

Rick Langenberg

Local business owners and operators recently got a sneak preview of the forthcoming dramatic hike in 2023 property valuations during a WP Chamber  of Commerce forum, and the picture wasn’t pretty.

Not surprisingly, owners raised a spree of concerns regarding the impact on local businesses and the overall economy, as well as questioning why commercial owners are getting the shaft and the need to make adjustments. Plus, many wondered what kind of chances they would have in protesting these values, which ultimately could lead to big tax hikes.

Now, it’s time for the entire community to weigh in on what could become a heated county issue for the next few months.

Last week, Teller County Assessor Carol Kittelson announced a community meeting on the valuation situation when addressing the county commissioners. The meeting is set for May 17 from 5 to 7 p.m. at the Ute Pass Cultural Center in Woodland Park.

Kittelson reiterated that many will experience shock at the notices they will receive, expected to be mailed out this week to about 27,000 property owners. The value notices represent what properties are worth as of June 30, 2022, the peak of a several-year real estate boom.   And based on preliminary data, these could represent increases, ranging from 30 to 100 percent, based on property classification. In many sample cases presented by assessor officials recently, vacant land values, increased by more than 100 percent, based on the previous assessment, done two years ago.

Even residential properties in Cripple Creek and Victor, often considered at  low scale of prices, rose at an average of a  60 percent-plus increase. These numbers had heads shaking during the earlier forum, sponsored by the Woodland Park Chamber of Commerce.

More Details Than Past Notices

And for the first time in recent memory, these notices will come with an estimated calculated tax levy from these valuations, in what Kittleson described as the “long form.” These tax tabulations, though, are just estimates. “We wanted to give the worst-case scenario…These are notices of valuations and not taxes due,” explained Kittelson.

In any case, the values could provide a jolt for residents and property owners due to the fact that for months, news headlines have showcased how the nation has undergone a market downturn with such factors as inflation, global tensions and declining home prices and homes under construction.

For the first time, the so-called seller’s market has taken a slight beating, with more properties available for buyers, who in the past, had to make offers well above the listed price, and often engage in a competitive buying contest with other people.

But these real estate factors have not impacted Teller County as much, according to assessor officials, who contend the local market has been quite resilient.

Still, the notices residents receive will most likely exceed what their properties are worth at today’s values.

Kittelson, as she did in the earlier chamber forum, made it clear that her office has little flexibility in making arbitrary changes. She said such action would result in an audit from the state, and probable financial penalties.

This point was hammered at the press and the public by the county commissioners at last week’s commissioners meeting.

“She (Assessor Carol Kittelson) is not the bad guy,” said Commissioner Dan Williams.  “Show a little grace to her office.”

Similar sentiments were voiced by Commission Chairman Erik Stone and Commissioner Bob Campbell, as they noted that the assessor has to abide by state standards in making valuations, even though these figures will undoubtedly anger many residents, as they represent values at the top peak of the post-pandemic real estate boom.

The community meeting is timed for this date, according to Kittelson, so residents  can initially review their notices of valuation.

Property owners have until June 8 to file a protest with the assessor’s office, which will issue a decision by the end of June.

Deputy Assessor Michael Akana has cited classification of property as probably the biggest area officials examine when considering changes.

Then, if they are still upset with their valuation notices, property owners can take their case before the commissioners, who act as the board of equalization. Still upset, then they can take their case to the state board.

Tax Relief In Sight

On the upside, the estimated tax bill residents receive  isn’t a done deal.

In fact, the tax bill residents will receive, could get lowered, based on current 2023 legislation, and even a pending state-sponsored proposal.

The county commissioners are big supporters of a bill, sponsored by Senator Mark Baisley, aimed at providing some relief to the pending skyrocketing value hikes.

This legislation would allow local governments to offer relief for residential home owners by temporarily permitting these entities to lower the mill levies, without getting hit with restrictions by the Taxpayer Bill of Rights law. Based on current  law, if a government lowers its mill levy, it can’t raise it again back to a status quo level, without  a vote of the people. This TABOR reality has often stopped local government officials from lowering property tax levies, based on the conservative fiscal realities of this area. Once a mill levy is decreased, officials often have a tough time bringing it back to the original tax rate.

This legislation would permit an out for municipal, county and special district entities. It is one of several pieces of legislation that could offer some local tax relief.

Kittlelson joined the commissioners in expressing support for this bill.

During their report, the commissioners said they heavily favored the Baisley sponsored bill, SB 108.  “This is an example of what we need to do,” said Stone, who outlined the bipartisan support for this effort.

But they also outlined a state-sponsored plan, which is aimed at offering a more broad-based, permanent solution, by placing a revenue limit on property tax increases. The language of this latter proposal, though, hasn’t been formally presented.