Everyone loves new homes — indeed, I love new homes! Everything’s new and better, it seems. And the prices of new homes often compare favorably to the price of existing homes.
But there’s often a hidden cost — higher property taxes.
County Assessor Jim Everson explained the history and use of “Metropolitan Tax Districts” to me, and here’s what I learned from him.
Back in the 1970’s there was a surge of anti-growth sentiment, typified by the Poundstone Amendment, which prevented any further annexation by Denver. Until then, developers would get cities like Denver to annex land for new developments and build the infrastructure — water, sewer, streets, etc. — knowing that future property taxes would cover that investment.
Once annexation ended, developers started creating tax districts which would issue 20- to 30-year bonds (which the developer would often purchase) to pay for this infrastructure work.
These bonds would be paid off by an increased mill levy for the life of the bonds. There are already 86 such tax districts in Jefferson County and more are being created every year. Thirty-five have levies over 30 mills. The highest five have levies of 75, 70, 62, 60 and 55.78 mills. When you realize that the total mill levy in the City of Golden is under 88 mills (and Denver is under 70 mills), such mill levies are a huge additional and hidden cost of purchasing a home in such a tax district.
There’s an irony in the explosion of such tax districts. They resulted from the anti-growth sentiment of the 1970’s, but nothing has done more to stimulate development in all those unincorporated areas.