Critics, Pitco at odds over
August 8, 2002
County assessor Tom Isaac wants everyone to understand that the question on the home rule charter amendment will not result in a tax increase if it is approved.
Isaac, who has served as the county’s elected assessor since 1988, says if voters approve the charter amendment, it will simply bring the county under the same rules as every other government in the state.
“A tax increase would be an increase in the mill levy or somehow result in a substantial increase in revenues,” he said. “This question doesn’t do that.”
But Isaac and other elected officials in Pitkin County are having trouble convincing voters of that.
Opponents such as Aspen City Councilman Tony Hershey aren’t buying Isaac’s interpretation. They say the county needs to make more cuts before it comes to the voters with hat in hand.
“I feel these restrictions are a good thing and the county needs to put its house in order before it asks for more money,” Hershey said in an e-mail to The Aspen Times.
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At first glance, the ballot for the Aug. 13 primary election probably induces a yawn in most people. Most lines on the ballot are filled by candidates running without opposition for the right to represent their party – Democrats or Republicans – in the general election this fall.
But there is one question on the ballot this summer about Pitkin County’s method for calculating property taxes that is significant and is generating a bit of controversy.
Question 1A asks voters to amend the county’s home rule charter – the voter-approved document that outlines how the county should be organized – so yearly property taxes can be calculated the same here as they are everywhere else in Colorado. It is likely to be the first of three property tax questions voters will have to answer this year.
As Isaac said, the change would not result in a tax increase, at least in any common way of defining the term “tax increase.” It would, however, allow the county to keep approximately $150,000 it collected this year, and it would help county budgets keep up with inflation, because the county will likely be allowed to keep slightly more over the long term.
Currently, the county has two formulas for calculating inflation and growth. One formula is contained in the home rule charter, the other in the Taxpayer Bill of Rights, also known as TABOR or the Bruce Amendment, in the state constitution.
The annual calculation for inflation and growth is a critical part of the budget process, because government spending in Colorado is limited to the amount spent in the previous year, plus inflation and growth.
“The problem between the home rule charter and the state constitution is that their definitions for growth and inflation are different,” said Debe Nelson, county finance director.
TABOR requires state and local governments to use the consumer price index for the Denver/Boulder area for the inflation input. The home rule charter requires Pitkin County to use the consumer price index for the entire United States, which is often lower than the Denver/Boulder consumer price index.
Nelson said each year she and her employees in the county finance department run both sets of numbers. They then use whichever is lowest to set the property tax mill levy. If voters approve Question 1A, it means she would only have to run one set of calculations.
For the first time ever last fall, the commissioners, recognizing that a budget crisis was looming, reset the mill levy with the higher calculation method, which happened to be TABOR. If voters approve Question 1A, the county will be allowed to keep the $150,000 difference, the equivalent of a $4 increase for a $500,000 home, according to the county finance department.
“Our property taxes are too high. Keeping the home rule charter the way it is will ensure they stay as low as possible,” Hershey said.
But County Commissioner Mick Ireland said the change would eliminate the “calculation competition” between the home rule charter and the state constitution.
“It would be a lot cleaner for the county if it only had one set of tax-limiting legislation to adhere to,” Isaac, the assessor, agreed.
County manager Hilary Smith said that if voters approve the change, it will only affect tax levy rates in future years. “There will not be any adjustment to prior mill levies, that I can assure you,” Smith said.
The property tax mill levy determines the amount of money property owners pay to the government each year. In 2002, the owner of a $1 million home in Pitkin County paid $271.75 in property taxes toward the county’s general fund. Other property taxes for items like schools, open space, fire protection, the hospital district and the city of Aspen – which the county collects and passes on – drive bills up significantly higher.
Property taxes make up just under a third of the county’s general-fund budget. Sales taxes and fees make up the rest.
The general fund pays for most of the services that people use in the county. Law enforcement and emergency management, vehicle licensing, elections, restaurant inspections, recycling, road maintenance and repairs, the county attorney’s office, community development, building inspections, code enforcement, assessments, administration, a wildlife biologist and many other services are all funded out of the general fund. It is also used to pay for studies and long-term planning.
The county commissioners were fully aware of an impending crisis when they were working on the 2002 budget last fall. When the general fund for 2002 was set at $17.4 million, they directed department managers to cut 5 percent from their operating expenses and eliminated six positions – all unfilled at the time – permanently from the county payroll.
In early June it became apparent that their prediction of a 5 percent fall in sales tax revenues had been too optimistic. Revised calculations predicted a $1.9 million deficit this year, and similar deficits in future years.
The county laid off three more workers, imposed a hiring freeze and began cutting many of the services – such as restaurant inspections – that have been standard fare for most of the past two decades.
Tuesday’s vote may give insight into just what kind of county services are available in the future.
[Allyn Harvey’s e-mail address is firstname.lastname@example.org]