About these ads

Breckenridge: Town blasts newspaper for ‘misleading’ story

Breckenridge, Colorado, viewed from the overlook on Ski Hill Road.

‘Tax hike’ headline spurred angry phone calls from residents; 2012 tax bills will go down after mill rate adjustment

By Bob Berwyn

SUMMIT COUNTY — Breckenridge officials took the unusual step of issuing a press release to correct information in a Nov. 9 Summit Daily New story originally headlined “Revenue dip has Breckenridge eyeing tax hike.”

In the online version, the newspaper used this headline: “Breckenridge gives initial green light on mill rate increase.”

After the story appeared, town officials started receiving phone calls from residents and property owners concerned about a possible tax hike, said town communication director Kim Dykstra-DiLallo. The town issued the statement to make it clear to residents and property owners that the council is not proposing a tax increase, which under Colorado law, can only occur with voter approval.

“We felt it was so blatantly wrong, we thought we had to address it,” she said, adding that Mayor John Warner may write a letter to the editor to set the record straight. “We needed to get a response out as soon as possible because it was making people angry,” she said, adding that the town council did not talk about a tax increase at the meeting referenced in the story, but did discuss an adjustment to the mill rate.

According to the town’s statement, “Both the front page headline and basis for the article are misleading and incorrect. In actuality, the Town of Breckenridge’s proposed property tax levy in 2012 will be $490,000 less than in 2011, and Breckenridge residents will see a decrease in the Town’s portion of the property tax … At no time during the Breckenridge Town Council meeting of November 8, 2011 was a ballot question or a tax increase discussed for 2012.”

At issue is the complex topic mill levies. Even if the mill rate increases, taxes don’t necessarily go up. It all depends on the value of the properties against which the mill levies are assessed. And in the case of Breckenridge, the actual amount of taxes to be paid will decrease in 2012.

Here’s how the town explained it in a prepared statement:

“The Town is projected to collect an estimated $4.04 million in property tax revenue in 2011 and $3.55 million in 2012.  As an example, an owner of a $500,000 residential property within Town limits paid $276.41 in 2011 and will pay $243.92 in 2012 in Breckenridge property taxes, a decrease of 11.8%. 

A portion of the Breckenridge property tax rate is calculated based on a formula approved by voters in 1998 to provide recreational facilities (i.e. indoor ice arena and expanded nine holes at golf course) to meet the needs of the residents and visitors.  That formula, as illustrated by the example above, does not create a tax increase for 2012.”

About these ads

9 Responses

  1. Glad this item was cleared up, now I’m more confused than before. It must be the weather!

  2. The major misunderstanding is that the town council WILL at some point go after home owners for more money. Yet they will not impose a lift ticket tax on Vail.

    • Then the voters will have a chance to either approve or reject it.

      • If they do what they did last time, and just increase the amount of the mill levy that they collect, the voters won’t have any say in it. They need to explain that they have the approval to collect the mill levy, and at this point they are not collecting the full amount. Clarification and communication.

  3. Lynda is correct, Bob. I was not at the meeting, but in speaking with a current council member, I believe the Town Council DID in fact consider a more noxious form of a property tax increase, one that would be immune to ratcheting down. If it’s the case, you can see in this response from town that Warner et al are threading a needle here about WHAT was discussed WHEN.

    John and a few others have in the past been quiet advocates of going after property taxes for revenue for Town as much as possible as he believes Colorado pays a very low tax rate (altho the state is right smack in the middle of OVERALL tax burden, which is a much fairer way of looking at it, much as the “47% of poor people don’t pay income taxes” canard is similarly using selective stats).

    That said, Summit Daily News screws up stories all the time (I wrote to Alex about an error in a recent election story saying that the DA position is the “only position in the county that has term limits less than three terms”

    However, what I find more interesting is Town Council is nowadays freaking out that there is increased coverage–it used to be a joke that SDN was never there, but many (if not everyone but me) thought it was a GOOD thing the press had zero idea what we were talking about–every meeting was like an exec session. For this, I commend SDN for actually covering meetings. I wish you had the resources to do this as well.

    What the voters WILL have a chance to do is determine whether or not we need four new council members when April comes, as three seats plus the mayors are up. We’ll see if Breck voter is up for the challenge or engagement to actually give a shit–they haven’t recently.

  4. Thanks for the coverage Bob. John

  5. @Dave. You and I are good friends, but I’m slightly offended, I totally give a crap, and I’m learning all the time about the inner workings and finer details of how things work. Please help me, and others, understand this stuff. You’re a feisty guy, and I appreciate that, lets make stuff happen around here, for the better.

  6. The Town is finalizing an FAQs but here’s a general overview that will hopefully help Daniel and others understand. Currently there are two parts of the Breckenridge property tax mill levy calculation. One portion is a fixed dollar amount. The other portion is a fixed rate.
    • The fixed rate portion of the mill levy covers general operations, and has been fixed at 5.07 mills since 2000.
    • The fixed dollar amount finances voter-approved debt payments, so when the assessed value of property in Breckenridge goes down, the mill levy rate is adjusted in order to yield the same dollar amount. The result is that roughly the same amount of tax is collected from year to year for the debt payment. This formula was approved by Breckenridge voters in 1998. The purpose of this portion of the mill levy is to pay off the debt to fund the expansion of the Golf course and the construction of the indoor ice arena, and was approved for 15 years (through 2013).

    An excerpt from the ballot question that was passed by the Town of Breckenridge voters in 1998 shows that the process of an annual adjustment of the mill levy is simply the mechanism that allows for the set (or fixed) dollar amount to be collected.

    “Shall the Town of Breckenridge debt be increased $11,000,000 with a repayment cost of $17,550,000 and shall Town taxes be increased $1,150,000 annually to pay such debt;”

    “Shall the mill levy be increased in any year without limitation as to [mill levy] rate but only in amount sufficient to pay the principal and premium, if any, and interest on such debt.”

    As an example, an owner of a $500,000 home (as valued in 2010 for 2011 calculation) in Breckenridge paid $276.41; the total mill levy rate for 2011 was 6.945 (debt service mill levy rate of 1.857 and general operating mill levy rate of 5.070). For 2012’s calculation, the same home is assessed at $420,000, and as proposed, the owner would pay $243.92, representing a total mill levy rate of 7.296 (debt service mill levy rate of 2.204 and general operating mill levy rate of 5.070).

    As proposed, the Town will collect approximately $4,043,717 ($2,951,868 for general operating/fixed rate portion and $1,081,070 for debt service from voter approval in 1998) in property tax revenue in 2011. In 2012, the Town is projected to collect approximately $3,554,992 ($2,470,464 for general operating/fixed rate portion and $1,073,790 for debt service from voter approval in 1998). So in actuality, Breckenridge residents will see a decrease in the Town’s portion of the property tax. NOTE: these figures based on the preliminary valuation from the County Assessor’s Office.

    Basically, when the assessed value of property in Breckenridge goes down, this mill levy rate for debt is increased. The result is that roughly the same amount of tax is collected from year to year. This formula was approved by Breckenridge voters in 1998. Yes, the debt service mill levy rate DECREASED when property values increased; however, the formula – approved by voters in 1998 – yields the same dollar amount.

    Thanks for everyone’s interest.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

Join 7,399 other followers

%d bloggers like this: