Fire Protection District Q & A Property Tax
The proposed establishment of the Estes Valley Fire Protection District to provide fire and rescue services to the entire Estes Valley will go to the voters this November. Each week, until the election, the Fire Services Initiative Committee will answer questions submitted by the residents of the Estes Valley. Questions are being grouped by subject. This week the questions involve the proposed 1.95 mill property tax levy.
I already pay tax and get fire protection services. Won’t I be paying twice?
No. Although you get a full range of services from the Town, your current property taxes cover only a small percentage of the costs of these services. Fire Department costs far exceed the money received from all Town property taxes. The rest comes from sales tax revenues, and currently, from subscription fees. The costs of providing for fire and rescue service is rising faster than the Town is able to match, and we need an equitable plan that will provide valley-wide services on a sustainable basis. We need a plan that ensures that all resident are paying equally.
Here’s the math:
For every $100 that you pay in residential property tax, the Town of Estes Park receives $2.45. The rest goes to the county and other taxing districts.
If the Town portion of your payment was allocated by expenditure, only 21 cents would go for fire and rescue services.
I already pay property tax and sales tax. Aren’t I being double taxed?
No. Although you get a full range of services from the Town, including road maintenance, snow plowing, police service, street lighting, and a lower water rate than county residents, to name just a few, the reality is that our current Town property taxes cover only a small percentage of the costs of providing fire and rescue services. The lion’s share comes from sales tax revenues. Under the new proposed district funding, the Town will continue to dedicate 7% of their annual collected sales tax revenue to the Fire Protection District, which will account for approximately 50% of the fire and rescue budget.
Businesses pay 3 times what residential property owners pay. How is that fair?
It doesn’t seem fair. It’s complicated, but here’s how that happens. Colorado, through the Gallagher Amendment, regulates the percent of state property taxes collected from residential and nonresidential (commercial) property.
The Gallagher Amendment, which was adopted in 1982, divides the state’s total property tax burden between residential and nonresidential (commercial) property. According to the amendment, 45% of the total amount of state property tax collected must come from residential property, and 55% of the property tax collected must come from commercial and undeveloped property.
Further, the Amendment mandates that the assessment rate for commercial and undeveloped property, which is responsible for 55% of the total state property tax burden, be fixed at 29%. The residential rate, on the other hand, is annually adjusted to hold the 45/55 split constant.
The residential property assessment rate floats each year in order to meet the 45/55 split. Because of rapidly increasing residential property values, the residential assessment rate has sunk from approximately 21% in 1982 to around 7% today.
In the 27 years since Gallagher passed, increase in residential property values have significantly outpaced the increase in the value of commercial and undeveloped property. In fact, residential property, which made up only 45% of the state’s total property value in 1982, today account for 75% of the state’s total property value. However, due to the Gallagher Amendment, residential property is only responsible for 45% of the state’s total property tax burden. Conversely, commercial and undeveloped property, which now accounts for only 25% of total property value in the state, is still responsible for 55% of the state’s total tax burden.
We encourage your participation in this important initiative. If you have any questions concerning the proposed establishment of the Estes Valley Fire Protection District, you can email them to email@example.com.