Soaring property tax bills draw ire of ‘old Aspen’
ASPEN – Aspen retiree Jim Markalunas was eagle-eyed last year both when the Pitkin County Assessor’s Office conducted a state-mandated property reassessment and when special districts set their tax rates.
Despite doing his homework and having an inkling of what to expect, Markalunas was floored when his tax bill arrived last month. He owed $8,010.74 – an increase of about $2,500, or 45 percent, from the year before.
He’s not sure how he and his wife Ramona will remain in the West End home they have owned for 56 years. Like a lot of longtime locals, they are land rich but cash poor – a condition that doesn’t pay the tax bills.
“You’ve got two choices in Aspen – you can either stay poor or leave rich,” Markalunas said.
Tax bills are never popular, but they really stung this year. By a quirk of timing, property values soared in the eyes of the government even while the market prices plummeted and the recession made it tougher for many people to absorb higher tax bills.
Those bills must be partially paid by the end of February or paid in full in April, so the issue is fresh on the minds of many property owners.
Assessors in Colorado are required to reassess property every other year, in odd-numbered years. The new assessment value calculated by the government was based on free-market value on June 30, 2008. That coincided with the end of the real estate bubble that drove up local real estate prices high and fast.
“I think the problem started with the assessor. They used that bubble to determine new assessment values,” said Don Davidson, a longtime resident of Cemetery Lane in Aspen. The problem was exacerbated by the special taxing districts, most of which took the full or partial windfall afforded by the high valuations, he said.
The county initially informed Davidson that his property value was up 68 percent. He protested last summer and won. Nevertheless, the reassessment still placed his property value 46 percent higher.
When his tax bill arrived last month, Davidson paid 25 percent more than the year before. “We’re in the worst recession anyone alive has seen, at least as an adult, but we’re paying higher taxes. Where is the logic in that?” Davidson asked.
The second-home development and sales frenzy that has dominated Aspen for decades is a double-edged sword for longtime locals. It drives up prices, which benefits them when they sell. But it creates monster tax bills for those who want to stay put.
Davidson’s neighbor, Ron Thompson, said his neighborhood is feeling the pain. The tax bill for his house on Snowbunny Lane soared 29.5 percent.
“This is still old Aspen,” Thompson said. “We’re just taking it on the nose.”
Thompson said he understands that county Assessor Tom Isaac’s office was following a mandated protocol when it revalued property in 2009, but he believes the county commissioners could have intervened to change that system. “I think it was more of a political problem with the commissioners,” he said.
Isaac said the reassessment is dictated by the state. He said he suggested tweaking the process 18 months ago at a meeting of the Colorado Association of Assessors. As written, state law requires assessors to base reassessments in the odd-numbered years on property values from June 30 the prior year. Isaac supports moving the date to Dec. 31 of the prior year – making the assessment more responsive to market conditions.
That would have benefited Roaring Fork Valley residents in this latest reassessment cycle. The 2009 values would have been based on prices as of Dec. 31, 2008, rather than on June 30, 2008. The difference would have reflected falling market values, and lowered many tax bills.
Any change would require action by the Legislature, Isaac said. The state’s assessors are divided on the proposal because it would give them less time to work on the monumental task of developing new property values.
Longtime Aspen resident Roine St. Andre said change has to be sought on the state, not the local, level. People who aren’t flipping property and making a killing through sales shouldn’t be hit by wild fluctuations in value, and in taxes, as long as they keep their property, she said.
St. Andre favors a modest annual increase for homeowners based on the price they initially paid for their property. When a property sells, the value would be adjusted to reflect current market prices, and the tax rate could be adjusted.
She and her siblings were hit by a hefty tax increase on the home they inherited when their mother, Peggy Rowland, died. The taxes on their Shady Lane house soared $3,126, or 14 percent, in 2009. That was after St. Andre appealed the reassessment and earned an adjustment to a lower level.
Isaac said the average property value increase in Pitkin County was 35 percent in the 2009 reassessment. But “the majority of the properties went up more than that,” he said.
In general, the cumulative mill levy in the upper valley dropped about 20 percent, Isaac said. But the reassessment of most property was greater than the mill levy decrease – resulting in higher tax bills.
Five property owners from four different neighborhoods polled by The Aspen Times showed that tax bills soared between 14 and 45 percent. Lenny Oates’ tax bill in east Aspen climbed almost 28 percent, even after he protested the reassessment and got it lowered.
“I was a little surprised by the amount it went up,” he said.
He found a bit of silver lining. The property tax bill provides a write-off for people still in their income-earning years, so that offsets some of the sting, he said. For retirees, there is no such benefit.
Like many taxpayers, Oates scrutinized his tax bill this year to see which districts increased the most. The Pitkin County Open Space and Trails Program and Colorado Mountain College “are the two that jump in your face,” he said.
The open space program kept half of the windfall it could have reaped. CMC left its mill levy the same, reaping the entire windfall, or, as Markalunas said, the college “took the full monty.”
The board of directors of many districts didn’t surrender the entire windfall this year because they feared the next reassessment, in 2011, will be much lower, resulting in less tax revenue. Some districts temporarily lowered mill levies in a special legal maneuver that doesn’t bind their hands in future years. CMC officials questioned the legality of such a move.
“I’m mad as hell at CMC,” Markalunas said.
ASPEN – Twenty-seven Pitkin County residents have filed petitions so far this year to use a little-known process to try to lower their 2009 property taxes, Pitkin County Assessor Tom Isaac said Thursday.
The property owners filed what is known as a petition for abatement. It is regarded as a second chance for property owners to lower their property taxes if – and only if – they didn’t appeal their property reassessment the government calculated last May.
Counties in Colorado must reassess property every other year, in odd-numbered years. Property owners can appeal those values. There were 4,576 protests filed in June in Pitkin County. The assessor’s office adjusted about one-third of them.
The tax abatement request is an entirely separate process. It is a tool for people who suffered sticker shock when they opened their tax bill last month, for example, or didn’t appeal their valuation for some other reason. They must make their case for their property value by using comparable sales for an 18-month period ending June 30, 2008.
If they can convince the county commissioners that their property value was set too high by the assessor’s office, they can get a refund on a portion of their taxes, Isaac said.
Property owners who want to protest their tax bill for 2009 due in 2010 can file a petition any time this year. Under Colorado law, a property owner can only appeal for the prior two years, Isaac said.
Petitions for abatement can be submitted to the office of the assessor or treasurer.
– Scott Condon
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