Basalt mayoral hopefuls sound off on $2 million property tax refund

Two candidates for Basalt mayor credited the town government Thursday for giving $2 million in voluntary refunds last fall for property tax overcharges but the third candidate said voters should have been asked to settle the issue.

Candidates Bill Kane and Rob Leavitt endorsed the town’s payment of the refunds.

Current Basalt councilman and mayoral candidate Bill Infante said he favored placing a question on the November 2019 ballot that would have asked voters if they wanted the town to incur debt to pay the $2 million in refunds or if the town should have been allowed to keep the excess revenue.

“I did not support the refund of money in the absence of a taxpayer referendum,” Infante said in a recent interview. “The town refunded $2 million to taxpayers and we are going to pay $2.3 million to a bank (to pay off the refund). This is debt. We have indebted the citizens of Basalt to the tune of $2.3 million.”

The three candidates are squaring off in the April 7 election.

Infante voiced opposition to the town taking on debt to pay the refunds when the council voted on the issue July 23. He was on the losing end of a 4-2 vote to issue the voluntary refunds. Councilman Auden Schendler and Infante wanted to ask voters whether the refund should be issued.

“I do not support the voluntary refund,” Infante said July 23. “I think voters should be the one to decide.”

The refunds were issued in October. State law held the town accountable for the most recent four years of property tax overcharges. The town mistakenly increased the property tax rate 11 times between 1994 and 2019. The earlier overcharges were written off because of a statue of limitations-type issue.

Infante said he still believes the course of action he and Schendler favored was best.

“If we are going to saddle taxpayers with a $2.3 million debt, it was my firm position, and it remains so, that the taxpayers should have had a right to vote on this,” Infante said. “It should have been put to a public referendum.”

If voters would have approved the refund and accompanying debt, he would have supported and implemented their direction, he said.

“It was a point on democracy that I was strident on, not whether or not we refunded,” he said.

In the council debate on the refund July 23, Infante said voters would be able to digest the complicated issue if the town explained the costs and benefits clearly. He indicated he favored avoiding the refunds and debt.

“I don’t see any downside in letting the voters decide and I think with the right ballot language we could secure approval, set the mill and avoid the $3 million in debt,” Infante said at the time. “Voters can handle the town questions, in my mind, if we explain the costs and benefits clearly.”

In a related but separate matter, town voters were asked in November to establish the property tax rate at 5.970 mills so the town government could maintain the current level of services and avoid severe budget cuts. The council unanimously voted to put that question on the ballot.

The town’s violation of the Colorado Taxpayers’ Bill of Rights, or TABOR, is an issue that none of the mayoral candidates can distance themselves from. All three were in town government in one role or another while the town was erroneously charging excess property taxes.

Here’s what happened in a nutshell: Colorado taxpayers approved TABOR in 1992, placing limits on revenue growth for taxing entities in the state and requiring any new taxes be approved by voters. Many local governments went to voters in the early 1990s seeking permission to partially ease the TABOR restrictions. Basalt voters granted such approval in 1994.

Basalt officials believed the ballot question set the ceiling for the town’s property tax rate but gave them flexibility to raise and lower the levy on an annual basis — as long as the 1994 level wasn’t exceeded.

A new town administration — with a new finance director, new attorney and manager in office for less than two years — discovered in fall 2018 that the town may have violated TABOR. They reported their suspicion to the council and hired experts on the tax law to verify the problem. That led to the voluntary refunds and the need to ask voters to re-establish a workable mill levy.

Kane was town manager from 2009 until 2012. The mill levy was raised in 2010, 2011 and 2012.

He told The Aspen Times in a recent interview the overcharges “were kind of any easy mistake to make.” The town staff and elected officials felt they “lived in the spirit of the law” by staying beneath the mill levy in place in 1994. There was no conscious effort to try to skirt TABOR, he said.

Other prior town officials, including Leroy Duroux, a former mayor and fiscal conservative, previously expressed a similar view as Kane’s.

Kane said he agreed with the current administration’s decision to voluntarily provide the refunds and go to election on the mill levy. The debt to pay off the refunds is an unfortunate but necessary cost of resolving the issue, he said.

Leavitt was a councilman from 2012 through 2016. The property tax rate increased three times and dropped once on the four budgets he approved.

He said he doesn’t believe the TABOR violation was due to a lack of oversight by elected officials. The council didn’t have the expertise to make sure the government complied with complicated tax law, he said. He likened it to an individual having to hire an accountant to file their taxes.

“The council looks to outside experts and staff for guidance and advice,” he said.

The town government did hire a new firm last year to conduct its annual audit and the annual budget ordinance will make it clear what the mill levy rate is compared to the current year.

Leavitt said based on the information he has available to him, he agreed with the council’s decision to refund the overcharge and go to voters for approval of the mill levy. The council is elected to make tough decisions, so it was proper to grant the refunds rather than go to voters for direction, he said.

“The town issued the tax refund, which I think was the proper thing to do,” Leavitt said.

scondon@aspentimes.com