Election Guide 2012: District seeks to increase mill levy cap
October 17, 2012
Shall the Morrison Creek Metropolitan Water and Sanitation District be authorized to impose a mill levy above that for the prior year, of up to 50 mills or such lesser amount as may be necessary to pay district expenses, for collection in 2013 and every year thereafter; provided that the growth in property tax revenues each year shall not exceed “inflation” plus “local growth” as defined in Article X, Section 20 of the Colorado Constitution during the preceding year and shall the proceeds of such taxes and any investment income thereon be collected, retained and spent by the district each year without regard to any spending, revenue-raising or other limitation contained in Article X, Section 20 of the Colorado Constitution, the limits on increases in property taxation in Section 29-1-301, C.R.S., or any other law that purports to limit the district’s revenues or expenditures as such laws currently exist or as amended in the future, and all without limiting in any year the amount of other revenues that may be collected, retained and spent by the district?
Yes or No
The Morrison Creek Metropolitan Water and Sanitation District in South Routt County near Stagecoach is requesting an increase in its mill levy cap.
Referendum 5C for those who live in the district asks voters to approve bumping the current 20-mill cap to 50 mills.
The district is asking for the tax increase because its officials say decreased property valuations are providing less property tax revenue, which accounts for two-thirds of the district's funding, according to a statement from the district.
Complicating the district's budget woes are TABOR restrictions that restrict its ability to make up revenue when property values recover.
Morrison Creek Metropolitan Water and Sanitation District board President Tony Borean said the effects of TABOR ratchet down on revenue in such a way that it will take many years for the district to get back to its current level of funding if the 20-mill cap is left in place.
Borean said the district's plan is intended to stabilize its funding, not increase it.
"We're not asking for relief from TABOR," Borean said.
The district met its current 20-mill cap after a 58 percent drop in property valuations in the tax period ending in 2010. A further 55 percent drop in valuations is predicted for the period ending in 2012, according to the district's statement. The 2012 valuation drop will affect property tax collections in 2014.
Using an inflation index and the value of new growth, TABOR has allowed for 7 to 8 percent increases in revenue per year in the past, according to the district's statement.
The maintenance costs associated with aging infrastructure like sewer line rehabilitation make stabilizing funding levels important for the district, Borean said.
Borean estimated that to keep funding at its current level, the district might need to increase the mill levy to 44 or 45 mills.
"Without this approval of the mill levy increase, a very large increase in service fees may be needed to offset the impact of the TABOR amendment. It is important to understand that the board is not asking for an increase in revenue or taxes — it is only requesting a mill levy increase to maintain the present level of revenue," the district's statement reads.
If and when property valuations in the area bounce back, the district's mill levy would drop to maintain a stable level of revenue under TABOR's growth restrictions.
The tax increase proposed by Referendum 5C would not sunset.