Garfield County property owners to see a drop in tax bills
June 7, 2013
GLENWOOD SPRINGS — A drop in Garfield County's assessed valuation of anywhere from 10 percent to 40 percent, depending on the type of property, may mean lower tax bills for property owners come next year.
But it will also mean some tough decisions for property tax-funded entities, ranging from Garfield County government to local fire districts and other special districts, as they begin drawing up budgets for the next two years.
"We're anticipating a 20 percent decrease in property tax revenues for the next two-year period," said Carbondale and Rural Fire Protection District Chief Ron Leach.
"That will be a big problem" in terms of trying to maintain the fire district's $2.8 million annual budget.
The district earned voter approval in the fall of 2011 for a $775,000 mill levy override to make up for what had already been a 28 percent decline in property valuations over the previous two years.
That tax increase will expire after this year, putting the Carbondale fire district in the position of either asking voters again to approve a new tax increase or making deep budget cuts that will impact emergency services, Leach said.
Garfield County government has been preparing for the coming decrease in property tax revenues for the past two years, county manager Andrew Gorgey said.
"The 2013 budget was adopted in anticipation of significant revenue decreases for 2014 and probably 2015 as well," Gorgey said.
The official assessed valuation for each taxing entity, for which property tax revenues are based, won't be known until August. But the county alone is looking at a "minimum" of $10 million less in property taxes, and probably more, Gorgey said.
"Final decisions about how to address that ultimately rest with the county commissioners," he said. "My job is to hope for the best, plan for the worst, and give the commissioners some choices."
Property valuation notices sent out last week to owners of residential, commercial, industrial and agricultural properties, as well as vacant lands, showed anywhere from a 10 to 40 percent decline compared to the last property re-valuation cycle in 2011, according to Garfield County Assessor Jim Yellico.
Valuations for vacant land are down the most, at about 40 percent, following a similar decline in 2011 based the previous two-year period, he said.
Countywide, residential property valuations are down an average of 20 percent compared to two years ago. And, valuations for commercial property are down roughly 10 percent.
"The Carbondale and Glenwood Springs area fared a little bit better, but those areas still experienced a decline," Yellico said. "Parachute residential properties were hit the hardest."
The latest property valuations reflect property values as of June 30, 2012, taking in the two year period from 2010-12, and will be reflected on 2014 property tax bills.
Based on more recent market activity, property values have improved some in the past year. But that won't be reflected until property is re-assessed for property tax purposes in 2014-15, Yellico explained.
Oil & gas decline
Still to be determined is the largest single sector of property in the county, oil and gas, which accounts for 73 percent of Garfield County's tax base.
Oil and gas properties, including both production and personal property holdings, are assessed annually, rather than every two years as other properties are, Yellico said.
Of the county's total $3.9 billion assessed valuation for 2012, oil and gas property accounted for more than $2.8 billion.
"The companies are still turning in their numbers, so we don't have exact figures yet," Yellico said. "But it's trending toward a 30 percent decline this year."
That's following a 5 percent increase in oil and gas property valuations in 2012 and a 34 percent increase in 2011.
School districts, including Roaring Fork Re-1, Garfield Re-2 and District 16, take in the largest percentage of property taxes of any taxing entity, at nearly 33 percent. However, revenue decreases from local property taxes for schools are backfilled by the state.
The decline in valuations does impact special districts such as the Grand River Hospital District in Rifle, and the six-county Colorado Mountain College district.
"It's probably not going to impact us as much as the local fire departments and smaller districts in which property taxes are their sole support," said Randy Glassman, chief financial officer for the Grand River Hospital District.
"We do have to plan for the ups and downs, but we also have other sources of revenue," he said.
The CMC district has also been preparing for the anticipated decline in property taxes for the past couple of years, said Linda English, chief financial officer for the college district.
"Once the oil and gas numbers come in, we will know more," English said. "At a minimum, though, we are looking at two years of declining revenues ahead of us."
CMC operates on a July-through-June fiscal cycle, and is in the process of finalizing a $57 million budget for 2013-14. That's down from $63 million this year.
"We are budgeting very conservatively for the next couple of years, and we may have to dip into reserves to meet our budget," English said.