Amid unprecedented increases in property values in Summit County and across Colorado, local and state officials outlined their plans to blunt the tax hikes home and landowners are otherwise poised to pay next year. 

Hosted at the Colorado Mountain College campus in Breckenridge on June 27, Summit County commissioners Tamara Pogue and Josh Blanchard, as well as Assessor Lisa Eurich, joined Colorado House Speaker Julie McCluskie and Sen. Dylan Roberts to hear concerns and answer questions from county residents.

Property taxes are based in part on valuations conducted by county assessor’s offices every two years during what is known as the appraisal period. This figure represents the value of a home, commercial space or vacant land. It is then multiplied by a statewide assessment rate before being multiplied by local mill levies, which fund a several local programs and entities. 

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The final figure that tells property owners what they will pay in taxes. 

“This reappraisal, we saw a lot of price appreciation happening at a very rapid rate right after the pandemic,” said Eurich, whose office recently reported receiving more than 7,300 property valuation appeals, the most in nearly 15 years.

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A driving force behind the rise in property values, which continue to hover around an average of $2 million for a single-family home, is a lack of housing supply and high demand in the county, Eurich said. 

Eurich’s office reported that home valuations were up 63% on average since 2021, though some values are even higher. Vacant land is up 90% on average, with increases as high as 300%. 

Officials have become particularly concerned about what the high tax bills could mean for lower-income residents, such as seniors on fixed incomes, who bought their property years before it soared in value.

“This is death by 1,000 papercuts. We have a lot of folks here who’ve lived here for a long time who are struggling with other aspects of inflation and this just compounds the problem,” Pogue said.

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Appealing valuations 

Eurich said her office is busy combing through the thousands of appeals it has received and said property owners should expect to see those decisions in the mail by Friday.

If a property owner wants to protest a decision, they can take their case to the Summit County Board of Equalization, which is made up of experts in finance, real estate and other housing industry leaders who are appointed by commissioners.

Those appointees make recommendations to commissioners before a decision is made later in August. Depending on the outcome, property owners can continue their appeal up to the Colorado Board of Assessment Appeals. 

Even if property owners missed the June 8 deadline to file an appeal, they will have another opportunity to do so next May, since valuations happen every odd year, according to Eurich. 

Local mill levies

Local and state leaders have a few tools at their disposal to mitigate the hundreds to potentially thousands of dollars in tax increases for property owners in 2024. 

One is the ability for local governments to temporarily lower mill levy rates, which was approved by the state legislature this year. 

The county is one of roughly 40 taxing entities that sets these rates to bring in revenue. Others include the Summit School District, Summit Fire & EMS, and the Red, White and Blue Fire Protection District. 

The county government only has authority over its mill levy rates, which account for about a third of all the mill levy revenue property owners pay in the county. Another third goes to the school district and the remainder covers the other taxing entities, according to Pogue. 

But a reduction in the county’s mill rates would have a disproportionate effect on county funding while also providing little relief for taxpayers, Pogue said. For example, if the county were to reduce its rate by 1% that would create $8 in relief for a $1 million home. But it would cost the county $700,000 in revenue, Pogue said. 

“So the decision we will have to make is, ‘How do we have the biggest impact given that difficult disparity?'” Pogue said. 

Proposition HH

Another relief measure pushed by state lawmakers is Proposition HH, which will appear on Colorado ballots in November. If approved, homeowners would be able to exempt the first $50,000 of their home value from taxation this year. That would then decrease to $40,000 through the 2032 tax year (second-home owners would only receive the benefit through 2025). 

The proposal would also slightly reduce the current statewide assessment rate from from 6.765% to 6.7% for the next 10 years.

Roberts said the measure is intended to “create property tax savings for every Colorado homeowner and commercial property owners and ensure that that reduction in property tax collection does not hurt local services.”

“Property taxes almost entirely go to your local services, the state does not collect a significant portion. They stay in your community,” Roberts said. “And they fund very valuable services that we all rely on.” 

The proposal would also siphon 1% of the total refund balance taxpayers are slated to receive in order to backfill those entities.

Under the Taxpayer’s Bill of Rights, Coloradans are expected to receive checks next year that could be roughly $850 for single filers and $1,700 for joint filers even if the proposal passes, according to The Colorado Sun. However, refunds would be reduced for higher-income earners for years afterwards until Proposition HH expires.

McCluskie said state lawmakers were uncomfortable dropping the assessment rate any further than what Proposition HH calls for.

“Part of the challenge for us is looking at property values statewide, not just what we see here in the resort communities but also say the eastern plains, the very small rural communities,” McCluskie said. “If we were to significantly drop assessment rates we could literally wipe out local government, fire districts, library districts, it would be devastating to those communities.”

Challenges ahead 

While these relief measures could make a difference for tax bills in 2024 and beyond, Pogue said local governments are challenged by the timeline. 

“Statutorily, counties have to pass a budget by Dec. 15. We have to pass the draft budget by Oct. 15. But when’s the election? It’s in November,” Pogue said. “So that really complicates the revenue forecasting.” 

For example, if the county decides to reduce its mill rate and Proposition HH fails, meaning there would be no guarantee of state backfill for lost revenue, it could force officials to cut services.

While local governments will still be seeing an increase in property tax revenue regardless of relief, those gains will be offset by the costs of inflation, Pogue said.

“We’ve seen in construction, for example, a 200% increase in what we’re paying over pre-COVID,” Pogue said.

It’s why budget reductions may be on the horizon if property tax measures blunt those revenues.

“This is the beginning of a process and a conversation with the community,” Pogue said. “When I look at the decisions that I am faced with and knowing what we might have to cut in order to create more affordability for this community, I really wrestle with that decision.”