Aspen to give property owners a tax credit
November 27, 2007
ASPEN ” City government will forgo nearly $2.5 million in excess property taxes next year in order to give Aspen homeowners a break on their tax bills.
The Aspen City Council on Monday voted unanimously to credit property owners .611 mills, which is between a 40 and 45 percent decrease from what could have levied on property owners, who were facing significant tax increases.
“This is a major amount of money that the city is going to forgo,” said Mayor Mick Ireland, adding it’s the first time city government has given a tax credit in decades. “This is actually a historic moment in the city of Aspen.”
The city’s current mill levy rate of 5.41 equates to $5.41 for every $1,000 of assessed property value.
With the temporary tax credit, property owners will pay 4.8 mills, which is $4.80 for every $1,000 of assessed property value. However, that rate is combined with a .65 mill levy to clean up the Roaring Fork River, which was approved by voters this month.
It could have been 6.06 mills had the City Council capitalized on a windfall in excess property tax revenue as a result of dramatic increases in assessed valuations throughout Pitkin County in 2007.
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The tax credit, which is only for 2008, will result in hundreds of dollars in savings for the average homeowner, Ireland said.
The city of Aspen is one of 18 taxing districts in Pitkin County that voters have allowed to be exempt from TABOR, a state law that requires government to lower its tax rate when property values rise. When property tax revenues exceed the constitutional limit, those taxing districts, including the city, can choose to keep the windfall, lower the mill levy or provide a temporary tax credit to property owners.
When voters set the mill levy rate in 2005, they agreed that it would last until 2010. They also approved using any excess property tax proceeds to pay for sidewalk improvements throughout town, new hybrid buses, as well as design an outdoor pool at the Aspen Recreation Center.
The mill levy reduction will still enable the City Council to complete those promised projects to the tune of a little more than $4.5 million in excess property tax revenue, which is estimated to be generated over a five-year period.
Ireland sees the tax credit as a compromise ” taxpayers get a break and City Hall will fulfill promises to the voters.
“This is the lesser of the evils to balance the burden and just collect the amount needed to do the job,” Ireland said. “It’s the right thing to do.”
But not everyone thinks it was the right thing to do. Even with a tax credit, business owners like Bill Dinsmoor, who owns Main Street Bakery, are facing significant increases because the state constitution stipulates that commercial properties are taxed higher than residential properties.
“All of the taxes are passed through the owner and onto to the tenant,” Dinsmoor said, adding his taxes will go from $11,000 to more than $20,000 next year. He said he’ll be able to pay it, but other business owners might not be able to weather those kinds of increases. Regardless, costs to the consumer will go up.
“I’m going to charge [Councilman J.E. DeVilbiss] more for his breakfast, of course,” Dinsmoor said, before asking the council to consider a more conservative approach.
Before voting, DeVilbiss, who routinely dines at the bakery, responded by saying: “I don’t want to pay more for my cheeseburger, Bill.”
“It’s coming,” Dinsmoor replied.
The City Council will revisit the mill levy rate next year and decide whether to credit property owners again, especially if valuations dramatically rise as they did this year.
Carolyn Sackariason’s e-mail address is email@example.com.