Editorial: Protect our economy; back CMC’s tax fix
Colorado Mountain College is, without doubt, a remarkable asset for western Colorado. Voters in the college’s 6,600-square-mile district, which covers six counties including Garfield, Pitkin and Eagle, should protect it by approving Ballot Issue 4B, a plan that allows the school to adjust its tax rate to offset an abstruse provision of state law.
The proposal does not increase a homeowner’s property tax bill. It compensates for a decrease in the statewide assessment rate triggered by the Front Range housing boom. More on that in a bit.
First, let’s consider CMC’s many benefits.
Places typically too small to offer higher education — Glenwood Springs, Rifle, Carbondale, Aspen and Edwards among them — are part of an institution that educates 20,000 people a year, many of whom become police officers, teachers, medical workers, tech workers, welders and entrepreneurs in our region.
The school is the lowest-cost college in Colorado, affords admission and eligibility for a $1,000 scholarship to graduates of any high school in its district, and partners with school districts to enable our children to gain college credit while still in high school.
It’s beyond a good deal. It’s an incubator of hope and fuel for a healthy economy in a rural area challenged by a housing squeeze and income inequality.
The school is responsive to the needs of its communities, offering rare programs suited to jobs in the outdoor recreation industry; welding and solar installer programs in Rifle to prepare students to work for energy businesses; and two- and four-year degrees in education and nursing, fields critical to sustainable communities with workers in short supply.
By the time they complete programs at CMC, many students are already contributing to the local workforce. CMC students already have figured out how to live here, so employers don’t face the challenge of recruiting would-be staffers to the area and losing them to sticker shock and lack of attainable housing.
We would be foolish to cripple this economic and social asset by choking its ability to pay for its programs.
But Colorado’s population growth, which is second-fastest in the nation and is mainly on the Front Range, in fact creates a threat to our Western Slope college’s budget.
Under the 1982 Gallagher Amendment, total statewide property tax assessments must be 55 percent nonresidential and 45 percent residential. Denver-area housing construction has pushed up the total value of residential property in the state at the same time oil and gas activity (which adds to the nonresidential property tax base) has dropped.
When residential assessed valuation statewide exceeds 45 percent of the whole, the Legislature, by law, must lower the percentage of a residential property’s assessed value that can be taxed. That means a mill levy brings in less money. CMC, whose revenue is about three-quarters from property tax and whose tax base is about 60 percent residential, is asking for the authority to adjust its mill levy to offset the loss when the assessment rate is lowered.
Rather than choosing to seek a mill levy increase every few years, the school is proposing a lasting solution.
That’s because, as the state’s population continues to grow, the Legislature is left with no choice but to lower the percentage of residential property valuations subject to taxation.
Were residential property values to slump again, as they did in the Great Recession, the law does not provide for raising the assessment rate.
Since the law took effect, the state treasurer’s website says, the assessment rate on residential properties has dropped from 21 percent in 1982 to 7.96 percent today.
Colorado’s population will continue to grow; the rate will continue to drop; CMC and other taxing units will face a worsening squeeze.
CMC’s solution does increase commercial taxes because the law also fixes the noncommercial assessment rate at 29 percent, so a higher mill levy means a higher tax bill for businesses.
This surely is less, though, than the value of CMC to providing a local workforce and the costs businesses would face without these workers being educated in their backyards.
Further, any tax break from Gallagher goes disproportionately to Front Range and wealthy second homeowners.
Speaking for local business, the Glenwood Springs Chamber Resort Association enthusiastically supports the proposal. It estimates that under CMC’s plan, this year’s nonresidential adjustment would have been $7 per $100,000 of assessed value.
Now, as if this weren’t complicated enough, the ballot proposal, because of wording required by the fiscal handcuffs of TABOR, refers to a one-time increase of $50,000, which is the cost of an election. Don’t be thrown off; this does not increase residential property taxes.
To boil down this complex proposal: CMC is asking for authority to offset state-mandated reductions in assessment rates on residential property in a way that keeps homeowners’ tax bills flat.
In the same spirit and with the same self-interested foresight that residents applied in creating CMC 50 years ago, we should approve this fix to ensure locally tailored higher education benefiting the western Colorado economy for at least another 50 years.