UPDATE: Town Council has voted unanimiously to place this property tax question on the Nov. 3 ballot.
The Vail Town Council will consider whether to move forward with a resolution to submit a ballot question to Vail’s electorate to address local impacts of the state’s Gallagher Amendment at its Tuesday, Sept. 1 meeting. The action item, Resolution No. 38, is listed as 5.2 on the virtual evening meeting agenda which begins at 6 p.m. with opportunities for public comment. To provide public input to the Town Council prior to meeting, please email email@example.com no later than noon Sept. 1. Or to provide public input during the virtual meeting, please register to attend at www.vailgov.com/town-council. The meeting is live streamed at www.HighFiveMedia.org/live-five.
Following discussions on Aug. 4 and Aug.18, Town Council directed staff to work with public opinion consultants from Magellan Strategies and Summit Information Services to conduct an online survey to probe opinions from Vail’s registered voters on a possible ballot question for the Nov. 3 General Election. Results from the online survey, which took place Aug. 24-27, will be presented during Tuesday’s afternoon meeting which begins at 2:30 p.m.
The Gallagher Amendment was approved by Colorado voters and adopted in 1982 in response to homeowner concerns over rising residential property taxes. It requires that residential assessed values comprise no more than 45% of the state’s overall assessed value. Non-residential properties, such as commercial and vacant land make up the remaining 55%. While the Gallagher Amendment sets the commercial assessment at a fixed rate of 29%, the residential assessment rate must be adjusted by the General Assembly during years of reappraisal to maintain a consistent ratio between total statewide assess values of residential and non-residential property.
From 2003 to 2016, the state-imposed residential assessment rate remained steady at 7.96%. Since then, due to recent significant increases in residential development on the Front Range, the rates have been adjusted every two years with another decrease projected in 2021. The statewide formula disproportionally affects communities in rural areas with a high proportion of residential properties relative to commercial properties, and local governments have endured loss of revenues too large to be offset by any increases in property values. Cutting expenditures to that extent could result in significant impacts to services provided to locals.
Voter approval of a “de-Gallagher” ballot question would diminish the impact of the Gallagher Amendment by allowing the town to increase or decrease its mill levy in order to effectively achieve a permanent residential assessment rate of 7.15%, the rate currently imposed on residential properties in the town and throughout the state
The proposed wording for the ballot question is as follows:
WITHOUT RAISING THE MILL LEVY FOR THE 2021 TAX COLLECTION YEAR, SHALL THE VAIL TOWN COUNCIL HAVE THE AUTHORITY TO ADJUST THE TOWN OF VAIL’S MILL LEVY RATE THEREAFTER AS NEEDED FOR THE SOLE PURPOSE OF MAINTAINING REVENUES THAT MAY OTHERWISE BE LOST AS A RESULT OF STATE IMPOSED REDUCTIONS IN THE RATIO OF ASSESSED PROPERTY TAX VALUATIONS SO THAT IN ORDER TO ALLOW THE TOWN TO SUSTAIN SERVICES TO THE VAIL COMMUNITY, THE ACTUAL TAX REVENUES GENERATED BY THE TOWN’S MILL LEVIES ARE THE SAME AS THE REVENUES THAT WOULD HAVE BEEN GENERATED HAD THE STATE NOT IMPOSED SUCH REDUCTIONS?
Yes ___ No ___
According to a staff memo prepared previously by Finance Director Kathleen Halloran, the current estimate for residential rates is an 18% decrease or an assessment rate of 5.88%. This will represent the third reduction in property tax collections since 2017. TABOR (Taxpayer Bill of Rights) prevents the town from increasing its mill levy to make up for those losses without voter approval. The decreases represent a significant impact to town services, including fire, police, public works, transit, parking, library and general operations. Over last three years, the town has lost $1.3 million and with impacts of COVID, the town stands to lose another $1.4 million in 2021.
If approved, the projected impact to Vail property owners based on 2021 estimates, would allow the town to keep $60 in property taxes for critical services on a home valued at $1 million. This ballot measure would not impact commercial properties, as the state has already fixed the assessment rate at 29%.
If the Town Council moves forward with the ballot measure, Vail will participate with Eagle County in the coordinated mail-in ballot for the Nov. 3 General Election.