Summit County officials skeptical of impact of property tax relief measure pushed by Colorado governor, lawmakers
With record-high property values, homeowners could be hit with steep increases in their tax bills next year. But Summit County officials are uncertain that a proposal from state Democrats to blunt the impact will have much of an effect.
After the unveiling of a proposal by Colorado Gov. Jared Polis and state Democrats to reduce property tax increases over the next decade, some Summit County government officials are skeptical of the breadth of relief it could provide.
Polis’ plan calls for reducing refunds from TABOR, also known as the Taxpayer’s Bill of Rights, shrinking the statewide residential property assessment rate and exempting the first $40,000 of a home’s value from taxation. Proponents of the plan say those efforts could cut property tax increases in half for the average Colorado homeowner. However, this wouldn’t apply for owners of second-homes or “investment properties,” according to the proposal.
The measure will need to be approved by Colorado voters as a ballot question this November, meaning its passage is uncertain. It could join a slew of other property tax-related ballot measures this fall.
“Given so much of this is a ballot initiative, that’s going to require us to do budgets for potentially four different scenarios,” said Commissioner Tamara Pogue during a May 2 Summit Board of County Commissioners meeting.
Property taxes hold major sway over the county’s budget and spending plans. According to a preliminary county report, property taxes accounted for more than one-third of the roughly $61 million in revenue the county brought in last year.
“If it comes down to a vote in November, you have to present a draft budget on Oct. 15. So everybody’s hands are a little twisted on this one,” said finance director David Reynolds.
The push for relief for taxpayers comes as home values, which are heavily tied to property taxes, saw a roughly 40% average increase across the state over the past two years. In Summit County, the increase has been closer to 60% to 70%, according to Summit County Assessor Lisa Eurich.
Eurich recently warned county property owners that they could see a major spike in the property taxes they pay next year based on the assessed value of their homes, which focus mostly on the average sale price of comparable properties over the past two years. Values began being sent out via mail to property owners on Monday, May 1.
That figure, called the notice of value, will then be multiplied by the current statewide assessment rate before being multiplied by the rate of local mill levies, which help fund several county entities such as Summit Fire & EMS and the Summit School District.
That final total is what property owners will pay in taxes, bills for which will be made available in January of next year, according to Eurich. Property owners will be able to pay in either two separate installments due Feb. 28 and June 15 of next year or in one full payment due April 15, according to Eurich.
But Reynolds said that even with Polis’ proposal to reduce the 6.76% statewide assessment rate by 0.06% and to exempt the first $40,000 of a home’s value, he does not believe it will provide anywhere close to the relief its proponents have claimed.
“I’ve run through a bunch of different scenarios. I don’t quite get to the numbers that the governor has,” Reynolds said. “Those changes just aren’t going to be that large for us.”
Reynolds gave the example of a $1 million home in the county. According to the proposed assessment changes, he said that home would see its property tax increase lowered by about 3% — or $140.
Commissioner Elisabeth Lawrence said she also struggled to see how Polis’ property tax relief plan would yield much of a difference for homeowners, adding that she had arrived at similar numbers in her estimates.
Some of that could be because of the far higher home values the county has compared with the rest of the state. While Denver-area average home prices have hovered around $550,000 this year, Summit County’s have sat at more than $1.3 million. That number becomes even higher when just looking at single-family homes, which have sold for an average of $2.14 million so far in 2023.
Relief will still be higher for lesser-valued properties, according to Reynolds, and will be felt most among middle- to lower-income residents. Officials have voiced concern about what the sharp tax increase could mean for homeowners on fixed-incomes, such as retirees, who may have bought their property years ago when it was valued significantly less.
Over the past two decades, the average sale price for a single-family home in the county has risen from around $500,000 to more than $2 million, according to RE/MAX’s report.
Dana Cottrell, a Summit County broker and spokesperson for the Colorado Association of Realtors, said in a previous interview that a rise in property taxes for some lower-income residents could even jeopardize their ability to keep their homes.
“I think it’s going to be a shock for everybody,” Cottrell said. “I believe it will really hurt our locals.”
Reynolds said he would likely bring an in-depth budget analysis based on potential property tax changes to commissioners next week after the 2023 legislative session ends.
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