Basalt residents are moving closer to receiving a rebate on their property taxes that were believed to have been overpaid through a violation of the Colorado Taxpayers Bill of Rights (TABOR). The Basalt Town Council this week directed staff to pursue drafting an ordinance providing what they are calling a “voluntary refund” of nearly $2 million.
Councilman Bill Infante was the sole no vote on the TABOR issue in the July 9 regular meeting with Katie Schwoerer, Jennifer Riffle and Gary Tennenbaum joining Mayor Jacque Whitsitt on the affirmative side. Auden Schendler was absent but in previous meetings suggested he didn’t agree that a refund was warranted.
A ballot question for this fall, which would set the mill levy rate at 5.957, was also contemplated by the majority of council on Tuesday night. Should that question fail to win voter approval, it would be set at a rate far lower.
Mayor Jacque Whitsitt said Wednesday that there’s still time for discussion and public input on both issues between now and when the language on setting the mill levy must be certified later this summer.
Whitsitt said that based upon the research she has done and observed, it’s clear the town is in violation of the state’s constitution. That sentiment has previously been expressed by Town Manager Ryan Mahoney.
“I’ve had too many experts say we are in violation,” Whitsitt said. “Clearly the money shouldn’t have been charged.” The mayor added that she also believes this is part of an overall “political issue of creating trust” with the citizenry.
“This is an opportunity to create a situation that brings us together,” she added.
The situation was unearthed in December when the town’s finance director, after reviewing previous tax collections, found what appeared to be incoming revenues above the TABOR limit.
Councilman Infante is of a different mind and said following the meeting: “I am much more in favor of soliciting the voters’ input” on the topic of a TABOR rebate, rather than deciding it at this level. He also suggested the TABOR funds have been employed for purposes that contributed to the good of the community.
“The money was used for the social benefit. It was not used for anything other than the good of Basalt,” Infante said.
A recent citizen survey showed that 52.48 percent of the respondents wanted a refund versus 39.36 percent who support allowing the town to keep the over-collected tax revenues.
Whitsitt has also reflected on town division and broken trust that emerged four years ago when officials were deciding on whether to buy what has been called the CDC parcel along the riverfront. That effort failed when the popular vote went down.
In councilwoman Riffle’s view, “I think it’s ludicrous and crazy to keep the money.” Among other assertions, she noted that the mill levy rate in 1994 was higher than 6 mills, which is above the current and proposed future rate.
Should Basalt move ahead with TABOR-prompted refunds, then a debt instrument known as a certificate of participation, which does not require voter approval, would be issued. Previously contemplated but not favored to fund the TABOR refunds were multi-year tax credits and selling off town assets like existing employee housing.
Councillor Ryan Slack suggested that if COPs – which are secured by lease revenues rather than a bond – are used, than early payback of those funds should be considered.
The town’s TABOR problem is thought to have emanated from property tax rates that have fluctuated since 1994; Basalt’s rates have moved 10 times since 2005.
TABOR was originally approved as a constitutional amendment in 1992 and requires a public vote before tax increases can be implemented. However, two years after it was voted in, Basalt residents opted overwhelmingly to “de-Bruce,” which lessens some of those regulations.
TABOR requires a maximum rebate of four years when there’s an overcollection, according to Town Manager Mahoney and experts including Dee Wiser, who has been advising Basalt.