La Plata County officials aren't sure when county property taxes were raised to their current 8.5 mills - just that it was many, many years ago. Now they are seeking voter approval to raise the mill levy by up to 2.4 mills, with the new revenue to go to county road and bridge maintenance.
This is question 1A on ballots that were mailed to active registered voters last week. The deadline to return them to the County Clerk is 7 p.m. on Nov. 3.
County representatives have been presenting their case for the increase at various community meetings including Bayfield and Ignacio. County Commissioner Julie Westendorff and County Planning Commission Chair Jim Tencza did the presentation to the Pine River Centennial Rotary Club on Oct. 14.
Tencza started by asking, "How many of you either rode your horse or mule into town today? If not, you are going to be concerned about this."
Property tax is the county's biggest revenue source, Westendorff said. Revenue peaked in 2010, reflecting the peak for property taxes from oil and gas, she said. Since then, property tax revenue has dropped by $15 million or 48 percent, mainly reflecting a drop in oil and gas property tax revenue from around $15 million in 2010 to just over $5 million in 2014.
Total property tax revenue was around $30 million in 2010. In 2014 it was just over $15 million according to the graph Tencza and Westendorff showed.
"There's a structural change in our tax base from oil and gas," Westendorff said. "We know production isn't going to go up. The (County) Long Term Finance Committee didn't see any change for the better. They looked at sales, property and use taxes (to increase revenue) and impact fees. They felt a property tax would be best because if your house is worth more, you pay more. Sales tax hits everybody the same."
Then the question was referred to the Fiscal Sustainability Committee, which Tencza said "was like herding cats" with 30 members. "We met for almost two months, looked at each of those items with pros and cons. Impact fees would be a drop in the bucket. Sales tax wouldn't be enough. The same with use fees. The big bang for the buck is property tax."
Once they decided that, there was a lot of debate about the specific amount. "We came up with a range, but that wasn't enough," Tencza said. "People asked how do we know what they will spend it on, and how do we know they're doing a good job. It has a 10 year sunset. The commissioners can adjust it down. All the revenue has to go to Road & Bridge. It will not replace existing Road & Bridge funding."
He continued, "We said we need a group of citizens to advise Road & Bridge on the highest priority projects, and to issue an annual report." That's part of the ballot question.
Tencza guessed that the last time the mill levy was raised was around 1990, before state voters approved the TABOR Amendment in 1992 to require voter approval of any tax increase.
Westendorff added, "There has never been a (property) tax measure voted on, because we haven't had one since TABOR went in."
The county's total 8.5 mill rate puts it 60th out of 64 counties for property tax rate. The median is 20 mills, Westendorff said. "If this passes, we'll be 10.9, still half the median. The Long Term Finance Committee recommended more."
She continued, "The commissioners didn't go for 1.5 because that wouldn't do it, get the job done; 2.4 will come close."
The finance committee also wanted to look at impact fees, she said. "Right now we don't collect from anybody except oil and gas. We have a work session next month on this. And to look at a use tax."
Westendorff advised that under state law, some of the additional property tax revenue would have to be shared with the towns to be used for roads - $41,954 a year to Bayfield, and $8,335 to Ignacio. The county will get $4.6 million.
A home with a median value of $350,000 now pays $20 a year in property tax for Road & Bridge, she said. That would increase to around $100 a year with the 2.4 mill increase, she said. She noted the impact on business properties, which are assessed at four times the rate of residential properties. A business valued at $400,000 would pay around $25 a month more.
"County roads are critical backbone," she said. "People ask what projects we will do. We have a capital improvement plan. You have to plan ahead for road maintenance." More than 50 needed projects are on the list. The 2.4 mill increase will pay for around 83 percent of them, she said.
The Road & Bridge Capital Improvement Plan is on the county web site, www.co.laplata.co.us.
"I pay $20 a year for Road & Bridge. I can't get a kid to shovel my sidewalk for $20," Westendorff said.
If voters reject the tax increase, a county fact sheet says, "While La Plata County will explore other options for increased revenue including grants and a possible use tax and other fees as recommended by the Fiscal Sustainability Committee, these are not expected to generate funds sufficient to meet the needs for county roads. Road & Bridge expenditures like snow removal, grading, chip and seal, road resurfacing and road and bridge maintenance and repair will be curtailed to ensure that expenses stay within existing revenue."
