Basalt town council approves refund for property tax overcharges
The Basalt Town Council voted 4-2 on Tuesday night to voluntarily issue refund checks to property owners for tax overcharges.
Council members Katie Schwoerer, Ryan Slack and Jennifer Riffle supported the refund with Mayor Jacque Whitsitt.
Councilmen Auden Schendler and Bill Infante voted against the measure because they wanted to ask voters if the refunds should be issued.
Councilman Gary Tennenbaum is traveling and wasn’t present for the meeting.
“I think we’re struggling with two different forces trying to do the right thing here,” Schendler said. “I do think the vote option is good.”
Infante said the town government would take on substantial debt providing the refunds, so voters should decide if that’s the proper path. He said voters should be provided with all pertinent information and allowed to settle the issue.
“Every penny collected was for the public good and the benefit of Basalt,” Infante said. “I don’t see any downside to letting voters decide”
Basalt’s top administrators discovered while working on the 2019 budget last fall that the town government had raised its property tax mill levy 10 times since 2006 in violation of the Taxpayers Bill of Right amendment to the Colorado Constitution. TABOR prohibits tax increases without a citizen vote.
Basalt voters approved a town ballot question in 1994 that eased some of the TABOR restrictions, but didn’t allow new taxes without a vote, according to the town’s consultants.
TABOR says that governments that have violated the tax limits are liable for refunds for four years. Basalt estimates it must pay back $1,89 million in overcharges for 2016 to ‘19.
That will result in a refund of $990 for a house with an actual value of $1 million and a refund of $3,990 for commercial property valued at $1 million.
The town government must also re-establish its property tax mill levy. A question will be placed on the November ballot asking voters to approve a mill levy. The exact wording of that question must be settled in August.
Riffle said getting that question approved is her foremost concern. She suggested that putting a question on the ballot regarding the refund might jeopardize approval for the associated mill levy question.
“The short-term gain of not refunding is far more dangerous than not having the mill levy approved,” she said.
Whitsitt said the town staff thoroughly researched the TABOR violation and the best way to remedy it so she is following their recommendation.
“Where I come from is that I believe the staff has done the due diligence for us,” Whitsitt said. “The work that they’ve done, that’s where I’m putting my trust.”
The top administrators are all relatively new. Town Manager Ryan Mahoney took the position in June 2017 while finance director Christy Hamrick and attorney Jeff Conklin joined the staff last year. They weren’t responsible for pattern of overcharges but reported the violation to the council.
The council will finance the refunds by using a fund mechanism called certificates of participation. The government will provide Town Hall or other property as collateral for investors’ funds. It will make payments of about $280,000 annually over 10 years to pay off the debt, Mahoney said.
The certificates of participation don’t require citizen approval.
There’s no date certain when the refund checks will be delivered, but Mahoney previously said it would be this fall.
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