The survey says — Basalt residents want refund for property tax overcharges |

The survey says — Basalt residents want refund for property tax overcharges


Basalt’s survey of town residents provided an opportunity for open-ended comments. Here is a sample of what people had to say.

• “A mistake was made, money spent, make sure we comply in the future.” — Basalt resident in Eagle County for more than 20 years.

• “For a mistake like this to happen and to not have anyone catch this TABOR issue is unacceptable. Our town government is awful. — Basalt resident in Pitkin County for between 6 and 20 years.

• “It would be silly/stupid to issue a refund and reduce Town services. Our taxes are already extremely low relative to other states and communities.” — Basalt resident in Eagle County for less than five years.

• “You owed the money then, you owe the money now. Give it back, it is not yours.” — Basalt resident in Eagle County for 16 to 20 years.

The majority of Basalt residents want a refund for property taxes the town government overcharged, according to results of a town survey.

The majority also doesn’t want Town Hall to lay a guilt trip on them about how a refund will require a reduction of services, according to Bill Ray, principal in WR Communication Inc., a survey firm that has worked extensively in the Roaring Fork Valley. The survey allowed respondents to provide open-ended comments.

“There were a lot of (comments), ‘I just want my money, I just want my money,’” Ray said.

Several respondents didn’t make a connection between the refund or a reduction of the tax rate with a decrease in services, according to Ray.

“There was general pushback — ‘Don’t hang reduction of services over our heads,’” he said.

The survey results that he unveiled at the regular council meeting Tuesday night dropped like a political bomb. Not only do residents want a refund, it’s a toss up on whether they will let the town maintain the current mill levy. Respondents also questioned the effectiveness of the leadership of the board.

“Wow,” said Mayor Jacque Whitsitt when Ray concluded his presentation. “Wow.”

The town commissioned the survey after the current administrative staff discovered that the property tax rate was increased 10 times since 2005. The staff reported the discovery to the council in a closed session. The council directed them to share the information with the public.

The overcharge is an apparent violation of Colorado’s Taxpayers’ Bill of Rights, or TABOR amendment to the Constitution. Basalt residents voted in 1992 to ease restrictions of TABOR and it appears that was mistakenly interpreted by former and some present town officials to mean property tax rates could be increased without a vote of the people. In reality, it meant excess revenue could be kept when property values increased and taxes raised more funds.

TABOR says that tax entities that violate the law are liable for refunding revenue collected for the most recent four years. Basalt officials estimate the cumulative refund amount would be about $2.3 million.

The challenge, Town Manager Ryan Mahoney said prior to the meeting, is how to provide that refund without crippling the town financially by drawing down reserves, drastically cutting service or a combination of the two.

While WR Communications didn’t have the time to conduct a scientific sample, Ray told the council there was a strong response rate to the survey sent to 1,529 households. The town received 282 responses from a mixture of older and newer residents as well as from residents of Eagle and Pitkin counties. The town falls into both counties.

When asked how the town should resolve the property tax overcharge, 52 percent of respondents said lower the future mill levy rate or provide refunds “even if that means the town will reduce some services.”

Nearly 39 percent said to set the mill levy at the current rate to maintain the level of services.

In a separate question, respondents were asked, “If an election were held today, would you vote ‘yes’ in favor or ‘no’ to oppose, to allow the town of Basalt to maintain its property tax at the current rate of 5.957?”

It was evenly divided with 42.55 percent saying yes and 41.49 percent saying no. About 16 percent were unsure.

Councilman Auden Schendler said the town government needs to provide information that reflects the reality of the situation. He said the word “refund” should be avoided and replaced with a phrase like payment from reserve.

Whitsitt expressed frustration that several years of property tax reductions have been forgotten in the discussion. Between 1994 and 2010, Basalt reduced or maintained the property tax rate nearly every year. The rate has increased 10 times in the 14 years since 2005.

The tax issue will be on the council’s plate throughout June and July. Mahoney said the staff would return with recommendations on questions for the November ballot. Whitsitt said she believes there must be two questions — one on maintaining the mill levy at the current level for the future and the other on whether a refund should be given for the overcharge.

If there was any silver lining, it was that some residents credited the town with transparency on the issue. The town staff brought the overcharge issue to the council’s attention. Mahoney has been manager for less than two years. The finance director and attorney are new this year. However, Ray said that respondents “do not separate current Town Council/staff from past years.” They lump government past and present together, he said.