By Doc Watson
Special to the Herald Times
RBC | The Herald Times sat down with Renae Neilson, Rio Blanco County Assessor since 1991, to ask a question many people wonder about: what is the mill levy? While the answer is somewhat complex in its execution, the basic concept is simple.
It’s helpful first to understand that the assessor’s job is to “discover the values of property, all the property within the county,” Neilson said. “This includes all different types of properties: the land, the structures, (and) personal property (which applies only to businesses).”
It’s also important to understand the difference between “real property” and “personal property.” “Real” refers to anything immovable: the land itself and anything attached to the land, such as buildings. “Personal,” in contrast, refers to anything movable, such as all the property inside a building. Only businesses are taxed for such property.
The mill levy, then, is the tax rate that is applied to the assessed value of a property. A mill (from the Latin mille, “a thousand”) is 1/1000 of a dollar, or to put it in more practical application, one dollar per $1,000 of assessed value.
So what does assessed value mean, which is different from market value? While market value refers to the actual value of the property if you were to sell it, the assessed value is arrived at by multiplying that actual value by an assessment rate. Currently in Colorado, the assessment rate for improved residential property is 7.96 percent.
All other properties “get hit a lot harder,” Neilson said. For vacant land, agricultural land, and businesses, the assessment rate is 29 percent. The hit is even greater on oil and gas production, which pays 87.5 percent, Neilson added.
Here is a practical example: if the market value of your house and lot is $100,000, you would simply multiply this by 7.96 percent (.0796) to arrive at the assessed value of $7,960—you pay taxes only on this amount.
The total mill levy on that real property, then, is based upon adding together the mill (or mills) for each of several tax districts in the county. If you live in the town of Meeker, for example, you are in District 1, which includes a mill (or mills) for the following districts (as of 2016): cemetery (0.867), Colorado River Water Conservation (0.253), county (9.05), fire general (2.323), library, (2.032), Town of Meeker (8.376), parks and recreation (5.699), hospital (7.280), sanitation (6.470), school bond (3.611), school general (6.435), and Yellow Jacket Water Conservation (0.209).
In contrast, someone who lives in the county also pays into these districts except Town of Meeker and sanitation (since they would have their own septic system).
Some districts are also further divided and receive part of the mill for that district. The county, for example, distributes its 9.05 mills to the general fund (4.2), road and bridge (3.5), public welfare (0.0), capital expenditures (1.15), and public heath (0.2).
There are also interesting differences between Meeker and Rangely. Rangely’s cemetery mill is far lower (0.162) but also has CNCC to pay for (6.6). Likewise, both fire general (0.847) and library (0.5) are much lower, but hospital is far higher (19.38) and Town of Rangely is also higher (10).
So, adding together all the mills, the total for District 1 is 52.065. To calculate your tax bill, then, you simply multiply the assessed value ($7,960 in our example), by the total mills (52.065), and then divide that by 1,000 (one thousandth of a dollar), which results in $414.44. In contrast, the total mills for one who lives in Rangely is 67.016, which results in $533.45 for the same assessed value.
While the assessor’s office at one time had the ability to adjust the mill levy, the TABOR (Taxpayer’s Bill of Rights) amendment to Article X of the Colorado constitution changed that in 1992. Designed to restrain growth in government, TABOR prevents state and local governments from raising tax rates without voter approval and cannot spend revenues collected under existing tax rates without voter approval if revenues grow faster than the rate of inflation and population growth. TABOR, in fact, actually resulted in some two billion dollars being returned to taxpayers.
“People should need about the same amount of money to operate, roughly,” Neilson said, which is why mill levies stay pretty constant. But when needs do arise, levies can increase. This is what voters are now called upon to consider. So, if a district needs more money to operate, Colorado voters decide whether or not to raise their own taxes.
By Doc Watson