Higher Property Values Mean Higher Property Taxes, But What About TABOR?

Some homeowners have asked me why their property taxes have increased as much as they have.  Isn’t TABOR (the Taxpayer’s Bill of Rights) supposed to limit revenues to growth plus inflation?

I asked Rep. Max Tyler how he would respond to this question, and he got me an explanation from Larson Silbaugh, senior economist with the Colorado Legislative Council, which provides research assistance to legislators.

Yes, TABOR does limit how much revenue a taxing district can collect, unless that district’s voters have passed a ballot measure exempting the taxing district from that requirement.

 

The Jeffco School District, which has the single largest mill levy in our county — currently 48.721 mills — did succeed in passing such a measure, so it can enjoy the windfall from increased property values.  (Only three of 178 school districts in the state have not obtained voter approval for exemption from TABOR’s revenue limitation requirements.)

 

When voters were asked to let the school district keep tax revenues that exceed TABOR limits, it didn’t occur to me that the increased revenue would come from me as much as from the growth of the economy as a whole. I didn’t realize that when my home’s value increased by 20% that my tax bill would increase by nearly the same percentage!

 

As a voter, I also thought that this provision of TABOR was implemented through the refund process, which is not the case with property taxes.  Instead, since property tax revenue is easily predicted based on biennial valuations by the county assessors, the taxing districts are able to adjust their mill levies downward so they only collect the amount of revenue allowed by TABOR. 

 

For example, Lakewood’s mill levy has gone down from 4.711 mills in 2011 to 2.03 mills in 2015. The Jeffco Sheriff’s mill levy has gone down from 3.2 mills in 2011 to 2.928 mills in 2015.  The West Metro Fire District’s mill levy has gone down from 13.774 mills in 2011 to 13.55 mills in 2015. 

 

Neither Golden’s nor Arvada’s mill levies have changed from 2011 to 2015, indicating that those jurisdictions must have passed a ballot measure exempting them from that provision of TABOR. 

 

Investigating other taxing districts, I was intrigued to discover that Edgewater’s mill levy was 5.03 mills in 2011, but went to zero in 2013 and is still zero.  According to the City’s finance director, this had nothing to do with TABOR. Rather it had to do with ending the city’s volunteer fire department and shifting that responsibility to neighboring Wheat Ridge Fire Department.

 

Looking at the figures above, I’m sure you’ve noticed that the mill levy reductions are nowhere near enough to offset the increase in assessed valuations.  If your mill levy dropped by 3 or 4 percent, but your valuation increased by 20 percent, it’s easy to question whether growth plus inflation justifies your increased property tax.  

 

However, as Larson Silbaugh pointed out in his Legislative Council report to Max Tyler, “The revenue limits in TABOR are calculated on a district-wide basis rather than for individual taxpayers.  When the taxable value of an individual property increases, property taxes can increase faster than district-wide revenue limits.”

Published Mar. 24 2016, in the YourHub section of the Denver Post (Jeffco editions) and in four Jefferson County weekly newspapers.

 

Did You Know? 5280 Magazine Doesn’t Choose 5-Star Professionals

5280 Magazine has a well-deserved reputation for choosing Denver’s top doctors, top restaurants, etc., so you might well believe from its September issue that they also choose Denver’s top real estate and mortgage professionals. But, in fact. 5280 Magazine has nothing to do with selecting those “Five-Star Professionals.”

For more years than I can remember, the magazine’s September issue has included a paid advertising supplement from a Minnesota company called Five Star Professional.  The magazine’s publisher told me that he has vetted the company’s selection methodology and found it valid, but I have studied their methodology, and I’m not so convinced.

I was led to investigate that methodology back in 2012 when a would-be seller said she selected another agent because she was a 5280 Five Star Professional.  I had never heard of that agent, so I did some research and found that she had never listed a home before!

 

Perhaps as a result of my raising the issue back then, Five Star Professional now verifies that agents not only are licensed, with no disciplinary actions on file, but also have actually sold some homes in the past year.  Once the “nominated” agents satisfy those few criteria, they are offered upsells starting at $445 for a 1/14th page directory listing, up to $4,695 for a full page ad.  An upsell price list I obtained back in 2012 is posted at www.JimSmithColumns.com.

 

Each year I’m surprised by how many truly successful agents are not listed.  In its defense, Five Star Professional will tell you “customer satisfaction” and not sales volume is their criterion. They claim to interview thousands of past clients, but the organization won’t disclose — even to the nominated agent — which clients nominated them.

 

Bottom line, consumers need to realize that it’s all paid advertising — like this ad — and that “nominees” who decline to pay big bucks get only their name and company published — with no contact information.  I figure the Minnesota company earns hundreds of thousands of dollars above what it pays 5280 Magazine for the advertising space.

 

What bothers me most, as a long-time professional journalist, is that 5280 Magazine is willing to let Five Star “winners” portray themselves as being “5280 Magazine Five Star Professionals,” when the magazine has absolutely no role in selecting them or creating the advertising supplement — and the agents who pay for those larger display ads write the ad copy themselves. 

 

5280 Magazine and Five Star Professional tell agents who appear in the advertising supplement that they should not state that the magazine named or voted them winners.  However, I see lots of violation of that guideline and no enforcement efforts.

 

You’ll note that the ad supplement isn’t even mentioned on the magazine’s cover, in its table of contents or on their website.  You can check it out yourself at www.5280.com/magazine. Compare this to their August issue featuring “Top Doctors” — an entirely in-house effort meeting high journalistic standards — and featured on their cover and on their website.

 

Let’s say I bought 16 full pages in the Denver Post and found agents who would pay to be listed as “Top Real Estate Professionals.”  Then I allowed each agent to say he/she was a “Denver Post Top Real Estate Professional.”  Of course, such a claim would be a misrepresentation.  Well, it’s also a misrepresentation (and a violation of the Realtor Code of Ethics) for any agent featured in 5280’s advertising supplement to say that they were selected a “Five Star Professional” by 5280 Magazine. I don’t like it.

Published Mar. 24, 2016, in the Denver editions of the Denver Post's YourHub section.

Just Listed: Applewood Home Combines Quiet Location With Access to Amenities

 

12095 W. 35th Avenue, Wheat Ridge

$395,000

Narrated Video Tour at www.ApplewoodHome.info

    This home is located in the Applewood area of Wheat Ridge, a few blocks east of the Applewood Shopping Center on Youngfield Street. Despite its ready access to I-70 and the mountains, it’s a quiet neighborhood with little through traffic.  It’s a traditional bi-level home with an oversized 2-car garage and two bedrooms/one bath on the lower level and three bedrooms plus living room, dining room and kitchen on the upper level.  It’s on a corner lot measuring nearly a quarter acre.  You’ll get a sense of its location and lot size when you view the narrated video tour (including drone footage) at its website above. There are no HOA dues.  Lewis Meadows Park with Lena Gulch running through it is only a block away.  Open house this Saturday, 1-4 pm.

Published Mar. 24, 2016, in the YourHub section of the Denver Post and in four Jefferson County weekly newspapers.