When the Basalt town government announced in July that it would be refunding money to property owners who had been overcharged on their property tax bill, in violation of Colorado’s so-called Taxpayer Bill of Rights (TABOR), folks for the most part were cool with the decision.
After all, it’s hard to resist supporting a process that results in a check with your name on it being issued.
There were of course some negative reactions.
Two members of the Basalt Town Council were adamantly against the town’s decision to refund the money — estimated to be about $2 million.
Auden Schendler argued that the issue ought to be decided by the Basalt citizenry by way of a municipal election.
And Bill Infante stressed that the money, though collected improperly, had in fact been used for the public good and, therefore, ought not necessarily be refunded.
There has also been a bit of justified concern that, because the town government will essentially be taking out a loan to cover the refunds, the actual amount that will be coming out of Basalt’s general fund to cover the TABOR snafu will be about $2.5 million, to be repaid at the rate of $250,000 a year for 10 years.
That’s a big chunk of change for a town with an annual general-fund budget of about $14 million.
But, by and large, Basalt property owners have seemingly grown comfortable with the fact that, come October, they will be receiving a refund check from the town government. Though exact numbers still need to be crunched, estimates at this point are that a house now valued at $1 million would receive a refund of about $1,000, while a business property valued at $1 million would receive about $4,000.
Not exactly like winning the Powerball lottery, but enough to positively affect the family finances of your average Basalt property owner.
There is, however, one noteworthy demographic that is not happy with the refund process as it has been laid out.
According to Basalt Town Manager Ryan Mahoney, people who sold their property during the last four years will not be receiving a refund. Doesn’t matter if they owned property for the previous 40 years. Doesn’t matter if they sold their property at the very end of 2018 — the cutoff point for the town’s TABOR payback obligations.
“TABOR sets a statute of limitations on the number of years a refund is required at four years, meaning the town should refund the past four years of over-collected property taxes,” Mahoney said. “Along with that statute of limitations, TABOR recognizes that a refund may be provided through any reasonable method, and the town of Basalt has determined that refunding current taxpayers, or property owners, is the most reasonable and legally sound basis for distributing the refund. This approach has been used in other communities and is supported by Colorado law. Since the refund will go to current property owners, those who have sold recently or during the four-year TABOR period will not receive a refund check.
“According to our town attorney and special counsel Dee Wisor, the text of TABOR allows for a voluntary refund by any ‘reasonable method’ and that ‘refunds need not be proportional when prior payments are impractical to identify or return,’” he continued. “Our attorneys have stated that, based on this language, there are Colorado district court cases supporting a voluntary refund to current property owners — e.g. Bolt v. Arapahoe County School District — as well as recent practice by other jurisdictions — e.g. Grand Valley Drainage District. Also, if the Town were to provide a refund through a temporary property tax reduction, which is one alternative method, such a refund method would necessarily be prospective in application — that is, to current/future property tax owners.”
In addition to what he perceives as a substantive legal foundation, Mahoney emphasized that the process of issuing those refund checks will be complicated enough without having to hunt down everyone who has sold property in Basalt in the past four years.
“Basalt has nearly 2,600 taxpayers, which makes this a labor-intensive process,” he said. “The town will begin the process of identifying all property owners within its boundaries on Aug. 30, utilizing the most-current databases of property owners held by Eagle and Pitkin counties.”
The town has not crunched numbers regarding the number of properties sold in Basalt in the past four years, who sold those properties or how much refund money would go to the ex-property owners were the town to include them in the refund process.
The dirty work will be done by an outside accounting firm for which the Basalt Town Council has budgeted $50,000.
Long-time Basalt resident Jim Kent is borderline livid about the town’s decision to exclude people like him from their TABOR refund process.
Kent moved to Basalt in March 1993, buying an unfinished home at 125 Village Court. In 2018, he sold that house for $685,000.
“It is incomprehensible to me that persons who have lived in Basalt, contributed to its well-being, aided in the institutions that serve the people, gone to meetings, participated in the various town-planning efforts — from the River Master Plan to Our Town Planning — are not included in this decision,” Kent said. “How is it that a newcomer that just bought a house, made no contribution to the town or larger community, would be a recipient of dollars returned? Capitalism at its worst. How or why did this decision get made to only return money to current landowners?
“This whole process should be stopped until an equitable solution is arrived at involving the citizens, past and present, in the solution,” he continued. “There is much legal work that needs to be done around this decision if the town does not want to find that there are several thousands of dollars of lawsuits that will be filed in behalf of the past home and land owners. The town council should just stop the process and rethink the legality and ethics of what they are doing.”
Kent is irked by the whole TABOR enchilada.
“My opinion is that it should have never happened in the first place,” Kent said. “Had the town council had adequate legal advice — which they did not have — and leadership on the council that was paying attention to the citizens they represent and not their politics, this would have not happened.”
Kent is not alone in his perspective.
Monica C. Ebaugh bought her house at 412 Elk Circle in October 2003. She sold it June 2017 for $671,000.
“I have been keeping up with the TABOR issue and assumed I would get a refund and was dismayed to find that the council made a decision to not refund money if property was sold in the last four years,” said Ebaugh, who worked as a clinical psychologist during her time in Basalt. “This is not a fair decision! On what basis was that decision made? Every property owner who was overcharged should be refunded.”
Add Shae Singer’s voice to the chorus.
Singer, who owns the Aspen Emporium & Flying Circus, bought the Midland Mall in downtown Basalt in 1980.
Two years ago, she sold two of the condominiumized upstairs offices to long-time tenants.
“My husband and I sold two units upstairs at below market value because they were tenants for almost 30 years,” Singer said. “They’ve had those units for two years and will be able to collect a tax refund on those units while we will not be able to. I think that’s wrong.”
Singer, whose extended family hails from Aspen, wonders whether Basalt’s decision to exclude people who sold their property in the last four years doesn’t merit some legal scrutiny.
“It doesn’t seem legal to me,” she said. “The town made the mistake over a lot of years. Those of us who sold our property ought to have the right to apply for a refund. Who are they to say we don’t get our money back?
“Governmental entities charge a lot of taxes,” Singer continued. “If nothing else, they should apply the overcharge to our tax bill. I continue to pay my property taxes on the rest of the Midland Mall. I don’t have a choice. I’m still getting a tax bill even though the town admits that it is still overcharging property owners. I think they should be paying back all property owners — with interest.”