Claws Bared on Real Cost of Proposed Property Tax Increase

Spirited discussion over at Dear Denver (The link takes you to what is now a blank page. Hmmm…) with regard to how much your property taxes will increase if Hick’s proposed 2.5 mill levy hike passes in November. Seems, Guerin Lee Green, of the North Denver News, announced in the September 7th edition of his community paper that the average increase for homeowners would be $2,380. (Green neglected to mention that the figure, $2,380, was over a twenty year period.) Giving the impression that the $2,380 was a yearly figure, Lisa Jones, of Denver Denver, took Green to task. She suggests the figure is only about $43.00 annually for a home worth $255,000. Actually, Lisa is kinda half right. Alas, Green is kinda all wrong. (See Mister Green’s comments, below. Very thorough explication of the issue.)

Dennis Gallagher, Denver’s Auditor, took pains to study both the proposed 2.5 mill levy increase proposed by Hickenlooper, and coupled that with the back door machinations of Governor Bill Ritter’s tax and spend Democratically controlled State Legislature. The State Legislature passed the School Finance Act that froze property tax rates–in opposition to a 1982 constitutional amendment–thus negating the requisites of the constitutional amendment that provided when residential property values rose, mill levies would fall; what was supposed to be an effort to limit the tax burden on property owners by the state.

So, the truth or the more accurate estimate of how much property taxes will increase–taking into account both the proposed 2.5 mill increase and the cost of the $550 million bond package–both from the Hick–and Ritter’s back door property tax increase (which, incidentally, only affects property that rises in value, like DENVER), looks more like about $100 per year: $36.54 for the state increase; $50.75 for the city mill levy increase and $12.52 for the bond package. (These figures from Chris Barge’s piece in the September 11th, edition of the Rocky Mountain News.)

I know, doesn’t sound like a whole lot of money to most. For some, it will be a burden.

The problem with the whole mess is, for me, just exactly what all this tax and spend in going to provide and what necessarily it won’t provide. What will still linger out there, undone, neglected, while big bucks are spent on projects that, in the Hick’s view, will make Denver a great city.

Still thinking about the whole mess.

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4 Responses to Claws Bared on Real Cost of Proposed Property Tax Increase

  1. Guerin Green says:

    All wrong? the cost is the cost, right?.. it’s the delta in what you will pay if all the measures pass and what you will pay if all the measures fail– divvied up by month, day, year, whatever period suits you, the total is the total.
    Here it is directly from Councilwoman Jeanne Faatz, who got her numbers for City Treasury(remember that Faatz chairs the City Council Finance committee)
    {By the way no one will challenge Faatz’ numbers- Rick Garcia wouldn’t on the phone tonight}:
    REAL Cost of Infrastructure Proposals

    (Property tax impact to owner of $255,000 home)

    $ 49 Increased 2.5 mill levy for on-going maintenance
    $ 12 Projects in excess of $480 “bonding capacity”
    $ 61 Increased taxes annually

    $ 61 Increased taxes annually
    $ 58 Foregone tax decreases for $480 million “bonding capacity” projects
    $119 Annual cost of Infrastructure Proposals

    Total paid over 20 years: $2380 *
    Bonds paid off (or they become “bonding capacity” for future voter-approved projects and new debt is issued)
    2.5 mill levy increase continues

    * Cost projection is approximate, given fluctuations in assessed property valuation and possible debt refinancing.

    Calculations by Councilwoman Jeanne Faatz, based on figures provided by City & County of Denver
    Paid for by Citizens for Jeanne Faatz; Marguerite Threlkeld, Treasurer

  2. Guerin Green says:

    Also note that DearDenver.com has pulled down its pages castigating the North Denver News.

    The above link is broken…

  3. georgeindenver says:

    Thanks, Guerin. And, thank you Jeanne Faatz. I guess what most folks will be looking at is the immediacy of impact the mill levy increase and bond costs will have on them. Don’t believe most folks will be looking twenty years out. And, yes, you’re exactly right: the cost is the cost. But, then again, the reality is that this feel good mayor and the majority of council will give the slick sell to this thing and, in doing so, will surely point out the benefits to be gained for the measly sum of $119 a year. Methinks that if any part of this tax and spend, bonding package is to be critically viewed by the electorate, then the twenty year figure is a very simplistic way of attempting to garner public scrutiny of the “package.” Folks need to look at each and every part of the “package,” and determine first, what’s not necessary, and secondly–perhaps more importantly–what critical core city functions/needs will necessarily be allowed to languish because the Hick and his minions believe being a great city has more to do with good acoustics at Boettcher than fully funding the Berkeley and Highland Park Master Plans. This whole thing is much, much more complex than simply summing totals and throwing the $2300 figure out there as some fearsome means to convince folks to vote no.

  4. Guerin Green says:

    George—

    I think you have done more than your fair share in examining the complexities of these proposals. We have a tough time in a community newspaper pulling together enough space to do this fully. The dailies won’t do the job either.

    There is zero discussion in the public square of the interest rate risk on this, the relative role of the City’s aggressive use of Certificates of Participation (COPs -debt the city incurs without going to the voters), the impact of going from the 15 year bond typically used to the 20 bonds, and City’s horrendous record of getting projects done on budget. No discussion of the city’s overall debt limits, and what is appropriate given the economic health of our residents and businesses.

    There are many worthy, important projects in this package– and there are some that are either incompletely priced, should be financed by other means, or simply benefit narrow interests and shouldn’t be paid for with GO bonds.

    I spent many years working on the bonding for the Central City road to I-70- the largest privately funded public works project in the state. I just wish the city fathers and mother were taking half the effort in protecting Denver taxpayers that we took with our private gamble…

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