Routt County road tax question
Without increasing the current property tax rate for all county mill levies, and establishing a maximum property tax rate of 12.266 mills for all Routt County property tax mill levies, other than for the special mill levies, shall Routt County be permitted, with respect to taxes due for tax year 2007 (collectible in 2008) and for each year thereafter, to retain and spend county revenues from whatever source without being limited by the spending and revenue limits contained in article X, section 20 of the colorado constitution, the 5.5 Percent limitation contained in section 29-1-301, colorado revised statutes or any other law?
The first $2,600,000 of taxes generated above the tax proceeds received by Routt County from property tax mill levies, other than from the special mill levies, for tax year 2006 (collectible in 2007) in each tax year from 2007 through and including 2012 shall be used solely for capital expenditures of Routt County and the municipalities of Routt County entitled under C.R.S. Section 43-2-202 to share in taxes collected for road and bridge purposes. After tax year 2012, the first $2,600,000 of such additional tax proceeds shall be used only in the construction (including the remodeling or expansion of existing buildings) or the repayment of debt incurred in connection with the financing of capital improvements including, without limitation, public buildings, roads and bridges and equipment needed to serve the citizens of Routt County. As used in this question, the phrase "special mill levies" shall mean the voter-approved mill levies for the Routt County purchase of development rights program, the Routt County museum and heritage fund and to provide services and support for the developmentally disabled.
A proposed property tax increase for Routt County residents would raise $3.3 million a year for road improvements and other capital projects.
The ballot question approved by the Routt County Board of Commissioners asks voters to allow county government to "deBruce" its property taxes, or be exempted from the Tax Payers' Bill of Rights, which limits the growth of revenues.
The increased revenues would fund improvements to 59 miles of county roads during the next six years. The deBrucing, however, would be permanent. And after six years, the revenue could be used for any number of capital projects. Some have expressed concern that the tax increase does not include a sunset, but county commissioners defend that decision because of the flexibility it will allow future commissioners.
The county hopes to raise $3.3 million beginning in 2008 to fund its road improvements. The improvements are based on the recommendations of the Citizen Road Review Committee, which was established in spring 2006.
"It was obvious to us that there was definitely a need to make a plan to accomplish these improvements," Commissioner Nancy Stahoviak said.
The scheduled road improvements are scattered throughout the county. Proposed projects include widening shoulders on Routt County Road 129, reconstructing much of C.R. 14 south of Colorado 131, and hard-surfacing several roads that are currently unpaved.
To raise that amount of money, the county commissioners are asking to be allowed to assess taxes at a rate of 12.266 mills. The commissioners point out that the proposed mill levy is actually a decrease from this year's mill levy of 12.420. However, it is a 32.9 percent hike from the 9.229 mill levy TABOR would require next year.
Some fear exempting government from the statute while the county's property prices are rapidly rising could have the effect of pricing people out of their homes.
"Any deBrucing question is problematic in an area with rapidly rising property values," Steamboat Springs City Councilman Paul Strong said.
In 2008, the tax increase would mean an additional $25 a year per $100,000 of estimated market value for residential taxpayers and an additional $88 a year per $100,000 of estimated market value for commercial taxpayers. Commercial property taxpayers take a much larger hit because the state property tax rate is 29 percent, compared to a 7.96 percent residential rate.
Because the county is required by state statute to share property taxes it collects within municipalities, the governments of Yampa, Oak Creek, Hayden and Steamboat Springs also would receive a boost to their road and bridge budgets. The city of Steamboat Springs, for example, would stand to gain $818,000 annually.
The $3.3 million in annual revenues would be used accordingly during the next six years: $2.6 million will be dedicated every year to road and bridge improvements, with $859,000 of that amount going to the municipalities' road and bridge budgets. The remaining $700,000 would be used to pay for increased county operating expenses, including energy and personnel costs.
The total cost of the road projects is projected to be $18,936,000. The property taxes will pay for $10,436,000, and county reserves will cover $8.5 million. Monger said the county is often criticized for the size of its reserves and said he hopes this contribution will relieve some of that animosity.
"We believe this is an appropriate match," Monger said.
After six years, the additional tax revenues would no longer be earmarked for road improvements. Commissioners said they didn't want to tie the hands of future boards. Possible projects that might be funded are expansions to Yampa Valley Regional Airport and the construction of a new office building on the county's downtown campus.
Steamboat resident Charles Baker, who like Strong has concerns with the deBrucing measure, said the tax should have a sunset and future projects should be subject to the approval of voters.
"The long and the short of it is that, if the ballot issue passes, the mill levy will be fixed," Baker said. "Our taxes are automatically going up, and we won't have a right to vote on future projects."
The commissioners take a different approach to that thinking, seeing it as a benefit that the county won't have to trouble voters with every project they undertake in the future.
"Basically the $2.6 million annually going into a capital fund will address the county's needs well into the future," Monger said. "We believe we've been prudent with the money, and we believe future commissioners will be prudent with the money."
Stahoviak acknowledged the tax could stand to raise much more than $3.3 million in coming years as property values rise. She said that doesn't mean the county will collect as much as it can.
"In future years, the commissioners will have options," Stahoviak said. "The final option is to refund some of that money to the taxpayers. That's always an option."