Just how low are Springs property taxes?

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Are our local property and sales taxes too high, too low or just about right?

Are Colorado Springs residents, as proponents of November’s proposed property tax increase claim, starving the city of needed revenue by enjoying unsustainably low tax rates? Or are the opponents of the tax hike correct in saying that the city has plenty of money, but seems incapable of properly managing its revenues?

When Colorado Springs is compared to Boulder, Denver, Fort Collins and Pueblo, local tax rates and tax burdens fall in the middle. They are neither high nor low — comparatively speaking.

That determination is based on considering the tax burden from a broad perspective, not ferreting out and analyzing every fee that local governments impose, and determining whether such fees are really taxes in disguise.

Defining such minutia is up to the courts — and in any case, the fees in question, such as storm water fees, generate only a tiny fraction of the total revenue that flow into the coffers of local governments.

And while selective use of tax statistics can strongly support arguments both for and against the proposed mill levy increase, passage would not substantially affect residential property tax bills, since the city collects only a small proportion of the total property tax bill.

Presently, Colorado Springs’ share accounts for between 6.4 percent and 8.4 percent of the combined mill levy, depending upon the school district in which a residence is located.

If approved by voters, the city mill levy would increase by 10 mills during the next six years. The first year’s increase would be five mills, with an additional one mill increase during each subsequent year.

However, because of bewilderingly different tax structures, straightforward rate-to-rate comparisons between jurisdictions are difficult to make.

For example, Fort Collins’ overall sales tax rate of 6.7 percent is substantially below Colorado Springs’ 7.4 percent rate, but because Fort Collins, unlike the Springs, imposes a 2.25 percent tax on food, the difference is misleading.

A low-income family in Colorado Springs would likely pay less tax than its counterpart in Fort Collins.

The state imposes a 2.9 percent sales tax. All five cities and counties used for comparison also collect sales taxes, and all include special taxing entities within their borders.

Colorado Springs

Taxpayers who live in El Paso County pay county property taxes of 7.748 mills, as well as a 3.540 levy for the Pikes Peak Library District. Total so far: 11.288.

After that, it gets a little murky.

Those living within the city limits pay another 4.944 mills to the city, bringing the grand total to 16.232. Those who live in any of seven other municipalities within the county pay between 6.289 mills (Monument) and 19.827 mills (Ramah).

Next step: special taxing districts.

There are 25 fire districts, with levies ranging from 0 to 12.423, 79 metropolitan districts (0-53), four sanitation districts (0-4.5), 17 school districts (24.301-60.216), 27 special improvement districts (1.00-51.00), 11 water districts (0.532-14.437), and four water and sanitation districts (4.001-25.517).

The Southeastern Colorado Water Conservancy District, created during the 1960s as part of the funding package of the Fryingpan-Arkansas water diversion project, levies a tax of 0.943 mills.

Grand total so far: 17.175.

And now the big ones: the school districts. Here’s what the owner of a $200,000 pays.

Harrison School District 2 levies a tax of 41.409 mills, for a grand total of 58.584 mills and a total bill of $932.65.

Widefield School District 3 levies 47.683 mills, for a total of 64.858 mills and a total bill of $1,032.52.

The total for School District 11, after the addition of a levy of 42.331 mills for a total of 59.506 mills, is $947.33.

Cheyenne Mountain School District 12 levies a tax of 42.331 mills, for a total of 61.969 mills and a total of $986.54.

And Academy School District 20 adds 60.216 mills for a total of 77.391 mills and a payment of $1,232.06.

So, suppose that voters approve the proposed tax increase come November.

That would initially increase property taxes on our theoretical $200,000 house in District 11 by $79.60, and by an additional $15.92 annually during the next five years, for a total increase of $159.20.

Residents of Colorado Springs also pay a total of 7.4 percent in sales taxes when they purchase non-exempt goods. Food, medicine and most services are not taxed.

The city gets 2.5 percent, which includes 0.1 percent for trails, open spaces and parks, and 0.4 percent for public safety

The Pikes Peak Rural Transportation Authority and El Paso County each get 1 percent, and the state gets 2.9 percent.

The city also levies other taxes and fees, including a 2.5 percent use tax, an occupational tax on “establishments selling alcoholic beverages,” a sales tax on “motion picture theatre tickets,” a monthly cable franchise fee of $1.20 per subscriber, a 2 percent lodging tax and a 1 percent automobile rental tax.

Denver

The City and County of Denver’s combined mill levy, including 39.657 for Denver Public Schools is 66.783, making the property tax on a $200,000 home $1,063.18.

That figure doesn’t differ significantly from the combined levies for Colorado Springs, El Paso County and District 11 — but Denver has many ways of attacking residents’ wallets.

The city/county sales tax is 3.62 percent, and rises to 4 percent for non-exempt items sold at “food, beverage and liquor stores.”

The Regional Transportation District tacks on 1 percent; the Scientific and Cultural Facilities District adds 0.1 percent; the Football Stadium District adds 0.1 percent; and the state still gets its 2.9 percent.

That makes a grand total of 7.72 percent, only slightly higher than Colorado Springs.

In addition, Denver levies an “occupational privilege tax,” payable by both employees ($5 per employee per month) and employers ($5.75 per employee per month). Then there’s a “facilities development admission tax,” consisting of a 10 percent surcharge on tickets sold to any event taking place in a facility “owned or leased by the City of Denver.”

And while Denver’s nominal sales tax rate is 3.62 percent, the city charges 4 percent on the sale of food or beverages in a restaurant. The city also levies a tax of four cents a gallon on aviation fuel, collects a monthly “telephone and telecommunications tax” of $1.12 per subscriber, a 4 percent use tax, an 11.95 percent lodging tax and an 8.45 percent automobile rental tax.

Note that Denver’s lodging and automobile rental taxes are respectively six times and eight times greater than those imposed by Colorado Springs.

The “City of Denver Tax Guide” gives, in sometimes-fascinating detail, a useful snapshot of Denver’s complex system of taxation.

Here’s an excerpt: “The sales and purchases of horses are taxable unless they can be used for breeding purposes, or unless they are purchased for resale.” (http://www.denvergov.org/Portals/571/documents/TaxGuide/Horses.htm).

It’s hard for a layperson to understand why, in the example cited in the guide, the purchase of five mules and five geldings would be taxed, while that of a stallion and five mares would be exempt — but the arcana of municipal tax policies are not easily subject to amateur analysis.

Pueblo

For Pueblo residents, the nominal sales tax rate of 7.4 percent is identical to that of Colorado Springs, and distributed identically between city (3.5 percent), county (1 percent) and state (2.9 percent).

Property taxes, however, are somewhat higher than those of either Colorado Springs or Denver.

Pueblo County levies a tax of 31.195 mills. The City of Pueblo levies at tax of 15.633 mills.

School District 60, which includes most of the city and is the county’s largest, levies a tax of 37.966 mills.

Among the four school districts located in Pueblo County, mill levies range from 37.966 to 40.804.

Southeastern Colorado Water Conservation District then adds a 0.943 mill levy for a combined total of 85.737 mills.

The total tax payment on a $200,000 home: $1,364.93.

Boulder

Boulder residents pay the highest sales taxes of any of the “Front Range Five”: 8.16 percent.

The city gets 3.41 percent; the Regional Transportation District gets 1 percent; the Football Stadium District and the Scientific and Cultural Facilities District each receive 0.1 percent; Boulder County gets 0.65 percent; and the state gets its 2.9 percent.

Boulder’s combined property tax rates, while higher than those of most Colorado Springs residents, are below Pueblo’s and less than those paid by property owners in School District 20.

The City of Boulder levies 9.841 mills; Boulder County levies 23.067; the Northern Colorado Water Conservation District adds 1 mill; and School District RE2 (which includes all of Boulder County) levies 39.113.

The total combined levy is 73.021 mills, and the property tax on a $200,000 home (if such a thing exists within Boulder’s city limits): $1,162.49

Fort Collins

Residents of this northern Colorado city pay the lowest sales taxes among the five, with a combined rate of 6.7 percent.

The city collects 3 percent, the state takes its customary 2.9 percent, and Larimer County gets 0.8 percent.

Unlike any of the five, however, the City of Fort Collins collects sales tax on “food for home consumption,” although at a slightly lower rate of 2.25 percent. Jurisdictions that exempt food from local sales taxes do so because such taxes are considered highly regressive, unfairly burdening low-income residents.

Property tax rates, by contrast, are the highest of the five, narrowly edging Pueblo.

The City of Fort Collins levies 9.797 mills; the library district gets 3 mills; the Fort Collins/Loveland water district levies 1.50 mills; the health services district receives 2.167; Larimer County levies 22.395 mills; Larimer County pest control gets 0.142; the Northern Colorado Water Conservancy District gets 1 mill; and Poudre R-1 School district levies 47.989.

The total combined mill levy is 87.99, and property tax on a $200,000 home is $1,400.80

Conclusion

Sales tax rates among the five counties and municipalities fall within a relatively narrow range: from a low of 6.7 percent to a high of 8.16 percent.

Combined mill levies, which depend principally on school districts, vary between 58.584 and 87.99.

Among the cities and counties, Colorado Springs and El Paso County have exceptionally low property tax levies, but our five largest school districts have an average mill levy of 47.2866, higher than any district except Fort Collins at 47.989.

Which brings us right back to where we started — smack dab in the middle.

9 Responses to Just how low are Springs property taxes?

  1. I’m still voting NO on any property tax increases!!! When the State and County and City learns to live within their budgets like I am forced to — then and only then I might re-consider.

    Are any of the departments rewarded for coming in under budget? No….didn’t think so.

    NO on any increases!!

    M. M. Mills
    September 25, 2009 at 1:53 pm

  2. Let me justify raising our property taxes based on Silicon Valley income tax. A home located in Peregrine or Briargate that sells here for $500,000 might sell for $1.5 million in Silicon Valley. Their tax rate is 1.5% of the value of the home. Why don’t we just compare how our property might be taxed in Silicon Valley or New York City, or even Boston and pay the same dollar amount? In fact, why don’t I just take the gross revenue of my business and send it to the county and city?

    Damned budgets and responsibility! Let’s spend spend spend. The government knows the only way out of a recession is to spend your way out of it. Let’s go on an orgy of fiscal irresponsibility and tax the residents even more! Heck the populace can provide us with an unlimited supply of money! UNLIMITED!

    In fact, the citizens should be a slave to the state, of course starting at the local level (we want our graft!).

    Maybe Doug Bruce isn’t all that wrong after all.

    Christopher Colvin
    September 25, 2009 at 2:38 pm

  3. Interested readers of the above article who want more facts, may be interested in knowing that Dean Venkat Reddy and the UCCS College of Business Alumni invite the community and BJ readers to a Crash Course in City Budget 101 with featured speakers Dr. Tom Zwirlein, Professor of finance, UCCS College of Business,member, Sustainable Funding Committee and co-founder, Southern Colorado Economic Forum and Dr. Penny Culbreth-Graft, City Manager of Colorado Springs and lecturer, UCCS School of Public Affairs :

    Friday, October 16th from 7:30 – 9 am
    UCCS University Center Theatre, Room 302
    Parking is free in Lot 3 only from 7 a.m. – 9:30 a.m.
    Complimentary parking provided by UCCS Parking Services.

    This is a just the facts session – no politics – for those interested in gathering more information about the City ‘s revenues and expenses and how decisions are being made – from a business finance position.

    This event is free and open to the public, but we do request that you RSVP as seating is limited: cobalum@uccs.edu or 719-255-3777.

    Jane Hammoud
    September 25, 2009 at 4:08 pm

  4. There have always been people in this city who don’t trust their government(s) Do we know what proportion of them vote? Should they influence you thinking.

    Right now I live near the corner of Austin Bluffs and Templeton Gap. In the 60’s I lived near the corner of Prospect and Templeton Gap. From 1983 to 2006 we live in two different locations in Rockrimmon. My wife has been in the two hospitals and a nursing home since May 2. The first was Memorial. The second was Center at Centennial. And the third is Brighton Gardens. For variety’s sake I have driven many ways to get to them. That’s to spend time with my wife, usually from early morning to mid to late afternoon. How many of you have driven on the roads herein that kind of variety over the years. How many of you have found them in the same condition they were in in the 60’s? They were good then. They are strictly lousy now.

    The van driver was taking me and my wife in her wheel chair to another place when he apologized for all the noise his van was making because of the wheel chair holder and because of the roads. He was very concerned for my wife.

    How many policemen have you seen wandering the roads these days? Not very many. How many times have you gone to renew your driver’s license and found the door locked because of the shortage of money. How about Public Health Clinic?

    I know that there are plenty of conservatives in this town, but I never knew until I moved here that they would starve their cities. I am really ashamed to drive when my kids come to town. Where do they live? In the same type of of environment: Texas and Arizona.

    There are also Libertarians represented in this city. I was a Republican from the time I started voting when I was 21 until recently. What I see now is not what I consider Republicanism. Why is there so much violence and rancor in the country. I changed when supply side economics came into vogue. It divided the country into two parts, I believe: them that has and them that don’t. That’s when the middle class started to disappear: not now, then. Mr. Carter was of no help, but it wasn’t all his fault.

    Most of us believed our leaders in those days. If we didn’t we voted them out. How many dynasties do we have now? Vote them out if you don’t believe them, but don’t hurt your city. We need the tax raise. TABOR has hurt us badly, not the Council. We don’t need TABOR in this city, we need that tax increase to make us a beautiful city again, to bring us more clean industry and more tourists.

    If you don’t believe me, just give it a try once, and then you can go back to your old ways.

    Gene Finkelstein
    September 25, 2009 at 4:34 pm

  5. So we have been regaled by City employees, City Councilmen, and newspaper editors alike, all declaring us to be the most “undertaxed” city ever! And like everything else we get from them, yet another lie.

    Thank you to The Colorado Springs Business Journal for a very professional investigation into this issue. Very nice work.

    Incidentally, I would like to see an annual total of city revenues, including every source, like lotto, federal and state grants, and taxes retained by the city and not refunded to the citizens. Then list the revenue totals by year, so we can see how much real growth in city revenues has actually occurred. And finally, lets calculate the real annual growth in total city revenues for the last ten years. I think that would be interesting.

    FactFinder
    September 25, 2009 at 7:50 pm

  6. EVERY TAX; regardless how much, who is collecting it or what it is called–is eventually paid for by John/Joan Q. Public. For instance: if you are renting a home, the owner pays a property tax. This tax is incorporated into the rent. When you buy a gallon of gasoline, the government has placed numerous taxes from the drilling to the pumping it into your car and everyone of those taxes are incorporated into the price you pay for that gallon of gasoline. The “Storm Drain” fees (tax) that I am charged on my rentals is actually passed on to my tenants—who voted to approve the taxes in the first place. Sometime back, I did a research on all the taxes that are hidden from public view as well as all the taxes we are familiar with, and I found that over 70% of what we earn is going to pay taxes, one form or another. There is an old country riddle: “If you had all the feathers you could carry, could you carry just one more?” The answer, of course, is no. The next time any government asks you for a hand-out, tell them “No Thanks.”

    R. Gene Scalf
    September 26, 2009 at 9:23 am

  7. John, according to the El Paso County website, their 2009 mill levy is 7.253.

    Dick Burns
    September 27, 2009 at 8:09 pm

  8. Also, when you say Fort Collins imposes a 2.25 percent tax on “food,” is that on restaurant food, or grocery items? Or both?

    Dick Burns
    September 27, 2009 at 8:14 pm

  9. We hear about all the parks being closed. Sure they are going to put a fence around them, so we can’t use them.

    Let the city live with in its budget, as we have to. I have some rental homes, and I sure as heck can’t raise my rent to cover all the things the city wants.

    /Bill Temaat
    October 5, 2009 at 3:36 pm