County concerned about falling property values
Falling property values could create the next financial crisis on the horizon for El Paso County and other governments that depend on property taxes.
The El Paso County Assessor's Office, which measures property values for tax purposes, will complete its collection of data on the county's roughly 260,000 parcels on June 30. It's too early to predict whether the overall value of properties in the county will fall, which would result in lower tax revenue, said Assessor Mark Lowderman.
But some county officials are watching the process closely as a dip in values would come on the heels of $9.1 million in spending cuts and other financial moves the county commissioners approved last week.
"We'd be back again" to cut spending further, said Commissioner Sallie Clark, one of five elected officials who oversee the county budget.
The county's property tax, called a mill levy, varies depending on the value of a parcel. For a $200,000 house this year, it runs about $120. That brings in $48.7 million to run the county government, or 21 percent of the budget. The county provides services such as law enforcement, road maintenance, child protection, investigation of disease outbreaks and managment of elections. Most services cover people who live inside and outside the boundaries of a city.
El Paso County's property tax rate is the lowest among Colorado's large-population counties. The next-lowest is Arapahoe County, about double El Paso County's tax rate. The total taxes a property owner pays are much higher, accounting for levies from school districts and other government agencies.
Property tax rates can't be increased without approval from voters.
The value of property in the county was about $6.5 billion in 2007. If the value were to dip, the revenue for entities that receive property taxes would decline. The last time it dipped was a 3 percent drop from 2002 to 2003, and the county's income from property tax fell about $1 million.
Some indicators point to history repeating. The average sale price for a single-family or patio home fell 7.5 percent from January to April, according to data compiled by the Pikes Peak Association of Realtors.
But that figure includes only four months of data, and it includes only houses that were sold with the services of a Realtor, Lowderman said. His office uses 18 months of data and includes all residential and commercial sales. A preliminary look at the numbers shows the property market in El Paso County isn't nearly as soft as some other parts of the country, Lowderman said.
"Some sections of town took some hits, and values may go down," he said. "But more neighborhoods and subdivisions have stable and slightly increasing values."
Still, he said, some owners could be surprised at how little their property values have increased.
"We have been accustomed to, for the most part, double-digit increases every other year, but we're not going to see that this year," he said.
Lowderman said his office expects to have the reappraisal of property done by the end of the year. Those property values will be used for tax calculations in 2009. Property owners are always a year behind in paying their tax bills. That means local governments wouldn't feel the effects of changing property values until 2010.
CONTACT THE WRITER: 636-0187 or perry.swanson@gazette.com
