The owner of a $500,000 commercial property in Bayfield pays a lot more in property taxes than a similar property pays in Durango or Ignacio, La Plata County Assessor Craig Larson told members of the Pine River Centennial Rotary Club.
The tax on a $500,000 commercial property in Bayfield would be $7,416 versus $4,608 in Durango and $4,306 in Ignacio, Larson said. That’s because the cumulative total of mill levies is higher in Bayfield.
In contrast, homeowners in Bayfield and Ignacio pay lower taxes than Durango homeowners because the homes have lower assessed valuations.
According to a recent county summary of property and sales taxes, Durango’s mill levy totals 30.459 for the city, county, school district and Southwest Water Conservancy. Bayfield’s rate totals 48.493 for town, county, school district, fire district and Southwest Water Conservancy. It doesn’t list other tax entities such as the library and cemetery districts. It shows Ignacio’s total as 27.9592 including town, county, school district, Los Pinos Fire and Southwest Water.
Notices of new assessed valuations will be mailed on May 1, Larson said. They will reflect what price a property theoretically would have sold for as of June 30, 2014. They will affect property taxes payable in 2016 and 2017.
The old valuations reflect lower housing prices in 2011 and 2012, when there were lots of foreclosures in the Bayfield area, Larson said.
There is a protest period for those who think their new valuation is not warranted.
Larson advised that residential property in Colorado is assessed at 7.96 percent of market value, while other categories of property – including commercial and vacant land – are assessed at 29 percent.
The reason for that is the Gallagher Amendment passed by voters in 1982. It limited residential property taxes to 45 percent of the statewide total. Back then, residential properties were assessed at 21 percent. The residential rate has dropped year by year, while everyone else stayed at 29 percent.
Towns want to annex commercial property rather than residential because of the assessment rates, Larson said.
One Rotary member commented that the taxes on her house in Bayfield are lower now than they were in the mid-1980s.
One reason for that, Larson said, has been property taxes paid by the natural-gas industry in the county. Coal-bed methane development started in 1988.
Natural gas is about 44 percent of the county’s tax base this year, he said. That’s been on a downward trend for several years, and that’s likely to continue because of extremely low natural-gas prices. Gas production is assessed at 87.5 percent, while gas-industry facilities are assessed at 29 percent.
Larson said that despite those assessment rates, total taxes on oil and gas producers are lower in Colorado than in some other states. Colorado’s severance tax is lower than in neighboring states, he said.
As tax revenue from natural gas goes down, school districts and other tax entities will have less money to work with. Voters must approve any increase in property-tax rates, Larson said.
