Valuation won’t decrease
Despite a lagging economy and sluggish sales tax revenues locally, the value of homes in Crested Butte and Gunnison County have remained steady in recent years, according to the county assessor’s office.
And with the home prices remaining stable, property taxes will likely stay at the same rate, despite the recent downturn in the economy.
Higher property taxes, which took up roost after the county looked at property values in 2007, are here to stay, according to county assessor Kristy McFarland. That increase saw the county’s overall property valuation skyrocket by 60 percent.
“In general, the assessor’s office is seeing the values holding from the previous reappraisal in 2007,” says McFarland. “That reappraisal set the values for 2007 and 2008, which is then used to calculate how much you’ll pay in property tax in 2008 and 2009.”
On August 25, the assessed value of all property in the entire district was certified, as it is every year, and sent to the taxing entities such as fire protection and school districts. With that information, those districts can set a mil levy for the upcoming tax cycle that will cover any increase in their budget costs.
Although the two are often confused as the same, McFarland says the assessment of a property’s value and the property tax the owners will pay are related, but independent of one another.
“The assessor’s office’s responsibility is to determine an equitable market value on Gunnison County properties,” McFarland says, adding that the property tax rate associated with those properties is calculated using the data collected from the sale of comparable properties in the previous 24 months, not the value of the properties themselves.
And while the value of property is assessed every two years, property taxes are collected annually, leaving an inevitable lag between the taxes people are paying and the amount a property can actually fetch.
“For the coming 2009 tax year, all residential values will be based on sales data from the 24 months prior to June 30, 2008,” says McFarland, adding that because of the low volume of commercial properties sold, data is required from the previous three to five years.
But because the assessed property values for the entire district are provided for the taxing districts, McFarland says people sometimes think their property taxes will also be adjusted every year.
“Everything stays the same for two years, or in this case since the last property assessment in 2007. Most of the reappraisal numbers would be the same, except for new construction, remodels and destruction, like from a fire. There can also be a change of status if a vacant lot were changed to agriculture, or something similar,” says McFarland.
In the last valuation period, property values increased by 60 percent, which was more than twice the 24 percent increase seen in the previous valuation cycle between July 1, 2002 and June 30, 2004.
If people want to know why their property taxes increased and where their money is being used, the assessor’s office recommends heading to the budget meetings for the taxing entities, which are open to the public.
“Hardly any of the public goes to these meetings because they’re boring. Last year, with the value of property going up so high, the taxes were high for some groups of people and people wanted to know why,” says McFarland.
One reason, other than the increase in property valuation, is the increase in budget costs for some taxing districts that are passed on to the property owners.
One public entity that requires funding through taxes to operate is the Gunnison RE1J School District. The district will ask voters this November to supplement the tax revenue it receives from property owners with a $55 million capital improvement bond.
Because of the different tax rates that are levied against businesses and residential property, businesses will bear the brunt of the tax increase.
Both types of property are taxed based on their assessed value, but the assessed value of a business is 29 percent of its actual value, while the assessed value of a residential property is 7.96 percent of its actual value. The actual value of a property is what it would sell for on the market during the appraisal period.
Since a mil levy is exacted on a property’s assessed value, such a large increase in the budget would equate to an increase in property taxes of between four and five mils, or between $4 and $5 on each $1,000 of assessed property value and the adjustment has already been made for the type of property.
For example, if the bond passes, a business in Gunnison County with an actual value of $532,000 and an assessed value of $154,000 would be required to pay an additional $774 annually, or about $62 per month in property taxes to cover the cost of the bond, on top of the property taxes already paid.
A residential property with a similar actual value would have an assessed value of $39,000 and because of a lesser tax rate, would be charged about $16 a month to cover the cost of the bond.
“These taxing entities finance their operating budget, in part or in total, with property taxes. Each of these taxing entities has a geographic area that they provide services to, and all property owners in that geographic area contribute a portion of their property taxes for those services,” says McFarland.
Because of that relationship between the taxing entities and property owners, budget meetings are often scheduled shortly after the assessor releases the total assessed value of a district. McFarland says by attending budget meetings, the public has a say in how much they are taxed and how their taxes are spent.
“Don’t wait until after you receive your tax bill to question the tax rate,” she says. “If you are interested in being involved, it’s important that you participate in the taxing entity’s budget process this fall.”
The dates and times for all of the budget meetings are required by law to be publicly announced, whether in the newspaper or as a posting in a location that is central to that taxing entity, or both.
For more information on the assessment of property, contact the Gunnison County assessor’s office at (970) 641-1085 or visit www.gunnisoncounty.org/assessor.html. For the rate of taxation in a given area, contact the taxing authority or for tax rates in the county contact the county treasurer’s office at (970) 641-2231 or visit www.gunnisoncounty.org/treasurer.html.