The burden property tax increases would place on businesses varies, but if approved, La Plata County still would have some of the lowest taxes in the state.
Some argue the increases would benefit businesses by improving necessary infrastructure – the airport and roads and bridges – but others say asking for tax increases when businesses are facing other increasing costs isn’t reasonable.
The tax increases would fund county road and bridge improvements for 10 years and pay about $40 million toward a Durango-La Plata County Airport terminal. The first phase of the terminal is estimated to be about $85 million.
If the increases pass, La Plata County would go from having the third lowest average property tax rate to the fourth lowest, according to an analysis by the La Plata County Economic Development Alliance.
“The tax increase we are talking about for the airport and the roads is so small (and temporary) that it will barely change our status statewide as a low tax county,” Roger Zalneraitis, executive director of the alliance, said in an email.
One way to gauge taxation is to compare how much revenue is collected to the total value of all the residential and commercial property in a county.
“You need some level of taxation to support basic services for residents and businesses. ... La Plata County’s taxes are so low compared to other counties, it is arguable that we are not meeting that threshold,” he said.
In 2015, La Plata County collected about $78 million in property taxes, or about 3.5 percent of $2.2 billion, the total value of property within the county, according to the Department of Local Affairs.
This was lower than counties with similar total values of property, according to an alliance analysis.
For example, Mesa County had $1.8 billion in property value in 2015 and it collected $116 million in property taxes, or 6.1 percent of the total value of the property.
Compared to other oil- and gas-producing counties such as Weld and Garfield, La Plata County has next to the lowest rate.
“We really don’t pay much property tax out here, no matter how you slice it,” Zalneraitis said.
If both property tax measures pass, an increase of 4.142 mills, a resident with a $395,000 house would pay $130 more annually in property taxes.
Someone with a $600,000 commercial building would pay $720 more annually.
A business’ ability to absorb a property tax increase depends somewhat on its business model and its ability to pass along increases to customers, Zalneraitis said.
Some business owners feel the benefits will outweigh the costs.
Owner of the Durango & Silverton Narrow Gauge Railroad, Al Harper, supports the tax increases for the good of the community and the good of his business.
About 10 percent of train riders fly into town, and if the airlines pulled out of the airport or cut back service, it would be a concern for the train.
“We could lose money if we lost 5 percent of our passengers,” he said.
It also makes sense to take advantage of federal grant money for the airport while it is available and residents only need to cover part of the total cost, he said.
Better county roads ensure that emergency services can reach homes in a timely way and that vehicles will endure less wear and tear, he said.
“I’m a neighbor, I’m a citizen, I understand these needs ... I’m willing to put my money where my mouth is,” he said.
He is in the top 1 or 2 percent of those paying property tax in the county, he said.
The Strater Hotel’s general manager, Michelle Martinez, understands the need to take care of the community, but it could be tough for small businesses to absorb, especially if mandatory payroll changes are approved.
The federal government will require businesses to pay salaried managers making less than $47,476 per year overtime beginning in December, unless Congress blocks the law.
Voters statewide will consider an increase in the minimum wage to $12 an hour by 2020.
“Everything hitting at once is going to be a burden. There has got to be some relief,” she said.
mshinn@durangoherald.com
