Denver Financial Referrenda Explained

George in Denver explains the financial impact of the ballot issues facing Denver voters this November:

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.)

For what it is worth, I think that the 1982 constitutional amendment was bad fiscal policy for the state. Revenues from a tax on property values should grow or shrink gradually with the tax base, which are a proxy for local inflation, economic growth and economic decline.

At any rate, according to George, the bottom line is that if voters approve all of the issues on the Denver ballot this year, that the decision they are making would increase taxes on an average home in Denver by $63.27 a year. Any other tax increases you see will happen with or without voter approval in November.

If your house is more valuable than average (which is about $255,000 of assessor determined actual value), you will pay more, if your house if worth less you will pay less. If you own business real estate or taxable business personal property, your hike will be a lot more than that, as business is taxed at a much higher effective rate than residential property.

I am pleasantly surprised at just how inexpensive these ballot measures will be if adopted. The City has shown restraint in what it is asking the people to approve. Also, the many categories put to voters keeps the city on a reasonably tight leash regarding how the money is spent.