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Mill levy increase

by Edi Sheldon
WALSENBURG — The residents of the city are displeased with the state of the community. Street lights are out throughout the town and weeds are sprouting in the parks. There are still many streets in need of paving and alleys which need to be cleared of weeds and obstacles. All in all, the town is looking a little shabby, not an ideal place for economic development. Let’s examine this issue.
Each year the city finance department analyzes what mill levy is necessary to run the city. That information is approved at the county and state levels. Beginning with the passage of the TABOR amendment to Colorado’s Constitution in 1995, voters must also approve any increases in their taxes.
In 1995, the city’s mill levy was 18.547. In 2010, it was 15.840. In 2011, it was 11.756. Since then, the city has been running on a mill levy of 9.756.
How could this happen?
Here’s the history.
When TABOR was enacted the city’s mill levy was at 18.547. It went down gradually every year after that until 2003. From 2003 to 2011 there were increases taking it back up to 15.840 without voter approval. This error was discovered in 2011 and so the mill levy was restored to the most recent legal level of 11.756.
During the general election that year there was a question on the ballot to allow the city to restore the mill levy to 15.840. The city pledged to use only so much of the funds as necessary for the administration of the city. However, this was rejected by the voters and the mill levy was kept at 11.756.
Another ballot question appeared to the voters in 2012 and was again rejected by the voters. Obviously people did not want their taxes increased, even to the level they had paid only two years prior.
Because the city had raised property tax rates without the approval of the voters in the years 2003-2011, TABOR required the return of the improperly collected excess funds. City council approved a 2-mill temporary tax credit to comply with the requirement. As a result, the city’s assessment of 11.756 mills produced an expendable rate of only 9.756 mills. Crews for law enforcement, streets and alleys, building inspection, and parks have been reduced as well as other city personnel.
Complaints about the state of our community are justified, but the city must operate within its budget constraints The removal of the recycling bins is just one of the more visible reductions in city government services.
What would an increase of 4 mills cost the property owners of Walsenburg?
Residential property is assessed at a rate of 7.96% of its appraised value. Commercial property and vacant land, etc. are assessed on 29% of the appraised value. An increase of 1 mill for a residential property appraised at $50,000 would cost a property owner an additional $3.98 per year. Commercial property appraised at 29% would cost the owner an additional $14.50 per year.
The 4 mills increase would cost an extra $15.92 per year in residential property taxes while for commercial property it would mean an annual increase of $58 annually. These dollars are based on the property being appraised at $50,000.
The city’s revenue streams are mostly from taxes. Taxes go into the general fund and this is what pays the lion’s share of expenses for the city.
Other business-type city revenue is produced from “enterprises” such as water, sewer, gas, and those revenues must cover the expenses of those activities.
In final analysis the upcoming request for an increase of 4 mills to your tax bill, will not cost homeowners and business owners much money. And the payback will come in the form of a community with better services and a improved appearance.