ALAMOSA — Depending on one's opinion of taxes, a low residential assessment rate could be seen as good or bad news. For rural areas in Colorado like Alamosa, however, the government is worried about future funding.
During the Alamosa County Commissioners meeting on Wednesday Alamosa County Assessor Sandra Hostetter gave a presentation on how the current rate of 7.2 percent is projected to fall to 6.11 percent in 2019. Hostetter explained that the drop is due to Colorado's Gallagher Amendment and Taxpayer's Bill of Rights (TABOR).
1982's Gallagher Amendment requires that residential assessed value must be 45 percent of the total statewide value. When a city grows and residential property value outpaces non-residential property, the assessment rate drops to maintain the ratio since the amendment permanently fixed the non-residential assessment rate at 29 percent. Meanwhile TABOR, passed in 1992, makes it so that all tax increases go to a ballot for a public vote.
"This is a non-starter," read a slide from Hostetter's talk, "because the majority of Colorado voters are residential property owners, and are unlikely to vote to increase their taxes. So, the residential assessment rate can go down to maintain the Gallagher split, but can't go back up because of TABOR."
Since 1983 the assessment rate has steadily fallen from 21 percent to the current 7.2 percent. Alamosa County's residential property tax base grew from $690.88 million to $715.31 million from 2016 to 2017 based on actual values. However, in that same timeframe the residential assessed values dropped from $54.99 million to $51.50 million.
"We're not growing at the pace Denver is growing so our assessed value is going down," Hostetter told the commissioners. "We have a lot of new construction, but we're not growing at rate cities are. It's putting the rural counties in a real bind and Alamosa is growing a lot faster than most rural counties. Some of them are in dire straits."
In 2017 if the assessment rate stayed at 7.96 percent, which was the rate from 2003-2016, the county's revenue would have been $1,437,021. But because it dropped to 7.2 percent the county's revenue was $1,299,818, a loss of $137,203. In 2019 the revenue will be down $131,012 with the projected rate drop.
"You look at our budget as a whole and think that's not that much money," said Alamosa County Administrator Gigi Dennis. "But that's, with benefits, three [full-time employees]. In counties that are even smaller than Alamosa, this is really a very significant, serious hit."
"Local schools are funded with property taxes and other taxes collected at the state level," Hostetter's slide said. "The state is on the hook to backfill the amount that the local property taxes don't provide. More backfill from the state means less money for the roads, colleges and senior programs, like the senior property tax exemption."
"The constitution isn't easy to change," said Alamosa County Commissioner Michael Yohn, "but it's very important to know where we're going."