Basalt has raised property tax rate 10 times since 2005, possibly violating state law

Basalt Town Hall building.
Scott Condon/The Aspen Times


Basalt town government has raised its mill levy for property taxes 10 times since 2005. Here are the tax levies.

2005 3.834

2006 4.015

2007 3.196

2008 3.364

2009 2.562

2010 2.742

2011 4.301

2012 4.549

2013 5.464

2014 5.802

2015 5.480

2016 5.782

2017 5.792

2018 5.957

Basalt town government increased its mill levy for property taxes 10 times between 2006 and 2018, possibly violating an amendment to the Colorado Constitution that prohibits new taxes without a vote of the people.

The discovery triggered an internal investigation by town staff, with the help of outside experts, to determine if Colorado’s TABOR law was violated. The town will hold a meeting Tuesday at 5:30 p.m. at Town Hall to update the public on its findings and possible solutions.

Town officials are being tight-lipped about their investigation. The Aspen Times was required to fill out a Colorado Open Records Act request to receive the mill levy rates approved by Basalt councils over the past 25 years.

That information showed that Basalt lowered or maintained its mill levy rate annually from 1993 through 2005.

Basalt might have run afoul of TABOR starting in 2006, when the mill levy increased to 4.015 from 3.834 the prior year. The mill levy rate increased again each year from 2010 through 2014, then again in 2016-18.

Basalt voters approved a ballot question in 1994 that allows the government to collect and spend revenue in excess of TABOR limits. That is a process known as “de-Brucing,” named after Colorado TABOR author Douglas Bruce.

However, even with that vote, Basalt still was required to get voter approval for new taxes. Town Councils enacted the 10 increases of the property tax rate without voter approval.

“The issue is that according to TABOR, once the property tax rate is reduced, it may not be increased without voter approval,” the town government said in a notice explaining the problem.

Former Basalt Mayor Leroy Duroux said town officials were trying to be responsible by lowering the mill levy when possible and still collecting enough revenue to provide services. Maintaining a higher mill levy, which would have been legal, would have placed a burden on taxpayers, he said.

Even though there were 10 cases where the property tax mill levy was raised, Basalt may not be on the hook for refunds for the excess revenue collected in all instances, if it is found it violated TABOR.

The wording of TABOR addresses what happens if a taxpayer files a lawsuit alleging funds were illegally collected. It doesn’t address what happens when a government reports itself for possible violations.

“Revenue collected, kept or spent illegally since four full fiscal years before a suit is filed shall be refunded with 10 percent annual simple interest from the initial conduct,” TABOR says.

Basalt officials said at a public meeting Jan. 24 they believe the town may only be responsible for four years of property tax collections when the mill rate was raised — totaling about $2 million. They might go to the ballot to ask voters for permission to retain those funds rather than refund them.

The 10 years that the mill levy was raised spanned the administrations of four full-time town managers — Bill Efting, Bill Kane, Mike Scanlon and Ryan Mahoney — and two mayors, Duroux and current Mayor Jacque Whitsitt.

Tom Smith, the town attorney from 2005 through March 2018, said he didn’t have enough background on the issue to comment.

“Budgeting is an administrative matter that is handled by the staff,” Smith said, adding he wasn’t typically involved in budget matters.

He said he is curious if the 1994 “de-Brucing” ballot question could have been phrased differently to allow Basalt to adjust its mill levy rate.

“It’s a problem that has a solution,” Smith said, referring to another ballot question.

Scanlon could not be reached for comment.

Aspen City Attorney Jim True said it appeared to him that Aspen used three tools to comply with TABOR. Voters approved de-Brucing in 1994. The city has used a temporary tax credit in some years to maintain the future ability to use the full baseline rate. It has also gone to voters to raise taxes for specific purposes, such as a 2007 vote for .65 mills for a stormwater treatment system.