Crested Butte real estate tax shows gain over last year

Houston Lumber sale responsible

While Crested Butte’s 2008 sales tax is off about 3.5 percent for the year so far, the real estate transfer tax (RETT) is actually running ahead of 2007, thanks to a couple of large property sales. Compared to 2005, the record year for the RETT in Crested Butte, the town is down approximately 40 percent.

Through May of this year, the town has collected $431,000 in real estate transfer tax. Last year the town had brought in just $304,000 during the same period, but in 2005, a whopping $716,000 had come into the Crested Butte town coffers by this time through the RETT.
Any time a property sells in Crested Butte, a 3 percent real estate transfer tax is imposed at closing. Because of restrictions approved by voters in the early 1990s, half of the money must be used for acquiring open space outside the town boundaries. The other half of the money must be spent on capital purchases such as buildings and vehicles or the maintenance of capital projects.
According to town finance director Lois Rozman, a few recent transactions have boosted the RETT in 2008. “We’re ahead of 2007 at this point, due in large part to the fact that Houston Lumber sold to Alpine Lumber at the end March,” she explained. “That brought us a big check in April. Otherwise we would be about even or slightly ahead of 2007.
“I know we will have a big check for the RETT in June because the Inn at Crested Butte just sold and that will put us ahead for that month,” Rozman continued. “We were conservative with the RETT budget for this year and I am confident we’ll make the 2008 budget. We are already about half-way there.” The town projected $900,000 for RETT collections this year.
According to Rozman, the RETT is a big source of town revenue, but with the exception of 2005 when more than $2 million was collected through the RETT, sales tax is still the major revenue source for the town.
By and large, sales tax revenues fund the town’s general budget but a quarter of all sales tax revenue goes to transportation, with the vast majority of that going to the Mountain Express bus system.
Overall, the Town Council has more latitude with how the remaining sales tax money is spent, especially during those years when the RETT is hefty and can take care of capital expenditures. Last year, approximately $895,000 in RETT came into the town, while in 2006, the collections totaled about $1.5 million.
“The town has seen these types of fluctuations before in both the real estate transfer tax and sales tax collections,” explained Rozman. “No one really likes it, but it’s just a matter of being aware and being conservative during the budget process.”