Posted: 20 Jan 2011 03:31 AM PST

Roaring Fork Valley homeowners shouldn't expect property tax relief when their new bills arrive in the mail this month.

Property taxes are expected to be about the same in most of the valley and slightly higher in parts of the upper valley. The tax bills are based on property valuations that were set prior to the recession and collapse of the real estate market. New valuations will be mailed to property owners in May, and that will affect tax bills for 2011 due in 2012, said Eagle County Assessor Mark Chapin.

Eagle County's tax bills started arriving Saturday. The Pitkin County treasurer's office said bills will be mailed this week and will be finished by Monday, Jan. 24. Garfield County will mail bills by the end of the month.

Chapin said his office has received some telephone calls from residents who expected their tax bills to drop since property values have taken a beating over the last two years. He said he has explained to them that pre-recession values are still being used to calculate property taxes.

Colorado law requires county governments to reappraise property every other year. The last reappraisal was in May 2008. That reflected market conditions between Jan. 1, 2007 and June 30, 2008, before the recession hit western Colorado full force.

Tax bills for 2009, which were paid in 2010, soared from the previous year because of drastic real estate appreciation during the boom years.

"By and large, taxes remained the same [for 2010]," Chapin said.

A homeowner in the Roaring Fork Valley floor in Eagle County saw property taxes go up $15 for 2010 compared to 2009. Another homeowner in Missouri Heights also saw a $20 increase in his tax bill.

In Pitkin County, the overall amount of taxes to be paid for 2010 during this year is expected to increase 5.5 percent, based on the mill levies set by the various taxing districts. Voters approved tax increases to expand Aspen Valley Hospital and to strengthen the Aspen School District's financial position in expectation of fewer state funds.

Although the tax bills are relatively stable this year, change is on the horizon.

County assessor staffs throughout Colorado are already working on the reappraisal that will reflect the real estate collapse. "They're pounding out numbers right now," Chapin said of his staff.

The new valuations will be based on market conditions between Jan. 1, 2009 and June 30, 2010, during the height of the recession. The new valuations will be mailed to property owners on May 1.

Based on preliminary data, it looks like values in Eagle County overall will drop between 30 and 35 percent, Chapin said, "and probably more in the Basalt area."

Property values appreciated by greater amounts in the Roaring Fork Valley portion of the county in the middle of the last decade because of the influence of Aspen, Chapin said. As a result, the El Jebel-Basalt area has taken a bigger hit in property values since the recession, he said.

Property values are expected to drop at least 35 percent in the Roaring Fork portion of Eagle County when the new valuations are released in May, Chapin said.

But relief for property owners will create headaches for taxing districts. Many district administrators are already bracing for drastically reduced property tax revenues one year from now. The Basalt Regional Library, for example, has reduced hours and cut staff in anticipation of a 35 percent loss in property tax revenues, said Kristin Becker, executive director.

scondon@aspentimes.com

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Proposed NY property tax cap short-sighted solution

Posted: 20 Jan 2011 11:40 AM PST



	(click for larger version)

January 20, 2011

Governor Andrew Cuomo's property tax cap proposal could mean trouble for many school districts.

In the coming weeks, the governor plans to enter into legislation a cap that would apply to all school districts, as well as local governments. Designed to protect property owners from skyrocketing property taxes, the cap prevents an increase in any district's tax levy (amount raised through property taxes) above 2 percent or the rate of inflation, whichever is less. However, with a 60 percent majority, residents have the ability to override the cap during budget elections.

While this is good news to property owners, district administrators find the solution shortsighted.

"A cap is a rather blunt instrument to control costs," said James Rodems, assistant superintendent for management services with the Baldwinsville Central School District. "It is an easy political fix to rising taxes. What it doesn't consider is the fact that some of these cost increases, especially pensions and health insurance, are outside of our control."

Other factors driving up costs are mandates imposed onto school districts by the state.

"I work with a very talented group of people to manage the effects of mandates on the district's educational programs. We have to comply with the various laws and that is what mandates are, laws," Rodems said.

District expenses such as facilities' maintenance and union contracts are increased by state mandates. For examples, the Tribourough Agreement requires expired union contracts to remain whether or not a new agreement has been negotiated, and the Wicks Law forces districts to have multiple construction contracts.

"It has been estimated [Wicks Law] increases a building project by 10 to 20 percent," Rodems said.

Other mandates include paying prevailing wages to outside contractors and pollution control compliance for buses, which adds $10,000 to the cost of every new bus.

The mandate issue has not gone unrecognized at the state level. In fact, Gov. Cuomo recently formed a Mandate Relief Redesign Team charged with reviewing existing unfunded and underfunded mandates imposed by New York State.

"The enormous burden of unfunded and underfunded mandates is breaking the backs of taxpayers, counties and municipalities across the state," Gov. Cuomo said.

New York State Senator David Valesky agrees mandate relief is needed.

"[The tax cap] has to be accompanied by real mandate relief because many of our local governments and school districts simply cannot continue operating under the status quo," he said during a Jan. 11 state of the area forum in Cazenovia. "The revenue is just simply not going to be there for the State of New York, and we have to do things differently at all levels of government."

While the cap will improve the quality of life for residents, the long-term effect may lead to inferior educational programs unless mandates and other state level issues are addressed and rectified.

"Unless state aid is re-organized to enhance equity, I think the net effect of a cap will be to reduce opportunities for students," Rodems said. "Seventy-five percent of our costs are employee related. Over time, as districts are forced to meet the demands of a cap, the public vote and reduced state aid, educational programs will be affected."

"We need to work to ensure that we have a good educational product for our students and community - that we graduate young men and women ready for the world. We cannot forget that we are in the 'kid business.' Losing our student focus in all of this would be a tragedy."

Staggering statistics

Unfunded and underfunded mandates drive up costs of schools, municipalities and the property taxes that support them. Due in part to these mandates, New York now has some of the highest taxes in the nation. For example:

New York has the second highest combined state and local taxes in the nation and the highest local taxes in America as a percentage of personal income - 79 percent above the national average;

Median property taxes paid by New Yorkers are 96 percent above the national median;

Property tax levies in New York grew by 73 percent from 1998 to 2008 - more than twice the rate of inflation during that period;

When property taxes were measured as a percentage of home value in 2009, nine out of the top ten counties in the nation were all in Upstate New York.

Taken from andrewcuomo.com.

Michigan manufacturers call for tax slash

Posted: 18 Jan 2011 11:21 AM PST

Michigan's manufacturers pay 29% higher overall business taxes than those in other states, and the personal property tax on equipment is largely to blame, according to a study by Michigan Manufacturers Association (MMA).

The report released today shows that Michigan manufacturers pay 14.2% state and local taxes on gross surpluses, compared to 11% of the U.S. average.

"We're getting our butt kicked on personal property taxes," said Mike Johnston, MMA vice president for government affairs. He said the tax should be eliminated, as many other states have done.

The personal property tax generates about $1 billion in revenue, some of it used by local governments.

Non-manufacturing businesses in Michigan on average pay an equivalent 9.8% rate in state and local taxes, according to the study by Ernst & Young LLP. It shows that manufacturing remains the largest segment – 17% -- of Michigan's overall economy.

Michigan should have lower business taxes that are spread more broadly, and which more closely reflect the national average tax burden, said Johnston and Chuck Hadden, MMA president and CEO. He said it should be done in a way that still provides revenue for needed public services.

The report emphasizes the economic power manufacturing provides to Michigan's economy, with large employment, capital investment, wages and impact creating other, non-manufacturing jobs.

Besides eliminating the personal property tax, the MMA report calls for:

• Eliminating the 22% surcharge on the Michigan Business Tax.

• Eliminating business taxes for smaller business owners who pay income taxes – what amounts to a double tax. Instead, those businesses could pay a smaller fee to support public services.

• Eliminating the tax on gross receipts that's part of the Michigan Business Tax.

• Continuing tax breaks targeted for businesses that agree to come to Michigan or expand and provide specified numbers of jobs. Those tax breaks are granted by the Michigan Economic Growth Authority (MEGA).

[Page 2 of 2]

Gov. Rick Snyder has criticized targeted tax breaks, but Johnston said they are needed because other states use them to lure businesses.

"To unilaterally disarm against other states is an absolute mistake," Johnston said.

The report comes a day before Snyder gives his State of the State address, in which he's expected to give broad outlines of his plans for tax reform. Snyder has called for replacing the Michigan Business Tax with a 6% flat tax on larger corporations, but that idea has been met with skepticism in Lansing.

Snyder has said his plan would exempt smaller businesses from business taxes. Johnston said he doesn't know that would affect 80% of the MMA's 2,500 members who employee 100 people or less.

"The tax has to reflect and understand the inputs of manufacturers," Johnston said.

He added, "Slash and burn is not our approach, but we've got to get creative about how we make Michigan businesses, and particularly manufacturing, competitive in the global economy."

Property Tax

Thursday, January 20, 2011

“No relief yet in property tax bills” plus 2 more

“No relief yet in property tax bills” plus 2 more

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