Historical error prompts Garfield Re-2 mill levy increase
A yearslong tax error means property owners within the Garfield Re-2 School District will soon begin paying higher taxes.
District officials spent hours Nov. 10 workshopping and discussing during the regular school board meeting just how much more they’ll have to increase the district’s mill levy.
Re-2’s current total program mill levy is 4.7, and the board now intends to raise the levy to 16.282.
“That’s going to be a significant impact on some of your property taxes,” Glenn Gustafson, a former chief financial officer at Colorado Springs School District 11 told the board Wednesday.
Gustafson recently retired from District 11 and now works part time for the Colorado Department of Education and is helping Colorado districts navigate mill levy corrections.
The need to raise Re-2’s mill levy originally stems from local policy decisions made in the late 20th century, Gustafson said.
A mill levy is used to calculate what a property owner will have to pay in annual taxes. A mill, equal to 1/1,000 of $1, is multiplied by assessed property value and residential assessment rates.
Under this formula, someone who owns property valued at $200,000 is typically paying $368 toward education.
In 1992, Colorado passed the Taxpayer Bill of Rights, an amendment that limits the amount of tax revenue the state can retain and spend. District voters, however, could choose to opt out of TABOR.
At the time, the Colorado Department of Education wrongly told districts that opted out of TABOR that they could begin reducing their mill levies. But, Gustafson said, local districts that received voter approval to opt out could and should have kept their mill levies higher and not replaced that revenue with state funding.
Voters of the Garfield Re-2 district chose to opt out of the tax revenue limitation in 1998.
Afterward, district property owners went from paying 26.177 mills to 4.7 by 2007. Meanwhile, ever since districts around Colorado began “de-TABORizing,” the state’s share for K-12 funding increased from 50/50 in the 1991 to 1992 school year to about 66% today.
In 2020, Colorado legislators set out to correct the historical error.
Since then they have signed into law requirements for school districts to raise their mill levies while reducing tax credits. The effort is aimed at re-balancing how the state and local districts share education costs.
New legislation also allows for the implementation of a state tax credit. For Garfield Re-2, that tax credit will be 11.582 mills, which will gradually reduce to zero by 2032.
Garfield Re-2 Chief Financial Officer Jeff Blanford said on Wednesday this gradual decrease of the newly established tax credit will essentially equate to annual increase of the mill levy.
“People are going to see their property tax bills increase slightly due to the mill increase, so we can adjust our tax base to where it should have been,” Blanford said.
So far, 86 out of the state’s 127 school districts have a target mill levy goal of 27 — the maximum limit. The other 41 school districts — including Re-2 — have target mills of less than 27.
Under the current 4.7 mill levy, Garfield Re-2 property owners collectively paid about $4.13 million in the 2021-22 school year, while the state paid $36.84 million.
“I think the most important piece for people to understand is that, really, we haven’t done anything wrong — we have followed the law,” Garfield Re-2 President Anne Guettler said. “Everybody knows the (state’s) general fund is being burdened, and it’s important that we pay our share.”
The news comes as two new board members prepare to assume their seats following the 2021 elections.
With a delay in final election results, the board is hoping to swear in new members Tony May and Britton Fletchall by Nov. 17. The board is scheduled to set the mill Dec. 15.
“So that would be one of the very first things that you guys do,” Guettler said to incoming board members May and Fletchall. “And, obviously, it gives you a little bit of time to communicate that.”
Guettler and fellow board member Tom Slappey are leaving office and are in the final days of their terms. In addition to Fletchall and May, Christina Maness starts an appointed term, while Jason Shoup won a new term and Meriya Stickler doesn’t finish her first four-year term until 2023.
“I’m sorry we didn’t do this sooner,” Guettler said of the mill levy increase. “Initially, we thought we were starting at 19 (mills) instead of 16 (mills). So we didn’t want to communicate the wrong information that would make it even more confusing.”
Reporter Ray K. Erku can be reached at 612-423-5273 or email@example.com.
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