Both Indian Hills Fire Rescue and Indian Hills Water District are Special Districts…. How will this impact their budgets next year (2019) ?
|Special District Association of Colorado|
|Update on Residential Assessment Rate|
As many of you already know, the Residential Assessment Rate (RAR) has been one of the main issues that SDA has focused on over the last year.
In the 2019 Legislative Session, the Legislature will once again review the new values determined by the biennial assessment of properties and set a new RAR to be applied in 2020-21. Preliminary estimates have indicated that the new RAR will likely be in the area of 6.2%, a reduction of 14.1%. The current RAR is set at 7.2%.
This of course leads to the question of what can be done to reduce the impact of this seemingly unavoidable hit to the revenue of special districts. Part of the problem is that the issue involves the interface of two Constitutional amendments, the Gallagher Amendment and the TABOR Amendment, and true relief from this RAR dilemma would really come only through a Constitutional amendment.
Since the success of a Constitutional amendment is dubious, various approaches have been floated to find actions that could be achieved through legislation instead. The latest approach was to extend the reappraisal period from the traditional two years to four years. This would have the effect of keeping the current RAR for an additional two years before it would have to be adjusted.
While this proposal was not without its own potential issues, a bill to make this change was drafted in this Legislative Session, and it appeared that it would be introduced as a late bill. However, we found out on Friday, April 27 that the bill would not be introduced at all…period, end of story. To address the problem, the Legislature has established an interim committee that will meet several times this summer to focus on these issues.
Many districts are now considering efforts to obtain relief from future RAR adjustments through local ballot questions. SDA is working with prominent attorneys and tax experts to develop potential ballot questions to seek local voter approval of a process by which district Boards could adjust their mill levies in anticipation of RAR adjustments. However, the drafting of these ballot questions is tricky, and success, which is of course not guaranteed, depends on a district’s unique circumstances.
As we continue our work on this ongoing problem, SDA will remain focused and committed to finding any possible solutions. Please stay tuned for more information as we will continue to keep you apprised of any future developments.