LETTER: An easy answer to Colorado’s tax property tax quandary

By John C. Fraoli, Letter to the Editor

EDITOR: Assessed actual home value is not the only factor in determining what your property tax bill will be.

There are three factors 1) Actual home value. 2) The assessed value factor (this is a percentage of the actual property value and is different for residential, commercial, agricultural and vacant land. And 3) The Mill Levies.

We will focus on residential. 

Ultimately, it is the mill levies that results in the final determination of what a homeowner’s tax bill will be.

First a county needs to determine how much revenue is needed to cover its expenses for the upcoming year. Then it determines what the mill levy should be in order to generate the needed funds to cover those expenses. Mill levies vary year to year based on the needed revenue calculations.

Here is an example: Let’s say that Arapahoe County projects that they will need 5% more funds for the upcoming year then they need for the current year. Let’s also say that the assessed “actual” home values across the board have risen by 50% (that is what is scaring everyone).

Now to the mill levy. Suppose last year they generated enough funds for the year by using a mill levy of 1.50 mills (not actual figure just used as an example). So now with the 50% higher assessed property values they could reduce the levy for 2024 to 1.00 mills, and this would generate the same amount of funds as last year. 

But since they will be needing a 5% increase in funds because the county’s projected costs have risen, they would just set the mill levy at 1.05 mills and that will bring in the needed funds to cover their projected 2024 expenses.  And the property owners tax bills would just be 5% higher for 2024 not 50% higher. Pretty simple. 

There is no reason why the Colorado counties should incur a windfall in tax revenue. They really only need to bring in enough funds to pay the upcoming bills.

 — John C. Fraioli, Aurora