The envelopes are about to arrive in the mail, telling you exactly how much your property is worth to local taxing entities.

And few things are more important to local taxing districts than the notice of valuation that arrives in your mailbox every two years. The value of each district’s property inventory translates directly into tax revenues by way of the mills levied against the property.

In Douglas County, those revenues are distributed to more than 200 taxing districts, all of which stand to collect a piece of the property tax pie. How much they collect, however, is not entirely contingent upon the property values.

Depending on the limits set by state law, voter approval and constitutional directives, the amount a taxing district can collect is derived from a mill levy that can fluctuate from year to year, within legal limits, said Scott Olene, manager of technical assistance for the Division of Local Governments.

Stationed within a division of the Colorado Department of Local Affairs, Olene is on hand to answer questions about the mill levy, taxing districts and accompanying regulations that are tossed into the property tax kettle.

He works closely with the state assessor’s offices, which are responsible for the administration of regulations that take the process from appraisal to notification to the end result, the tax bill.

For those taxing entities who fear a decline in market value automatically results in a decline in revenue, Douglas County assessor Teri Cox is the first to set the record straight.

“It is not accurate to say when property taxes go down, the taxing entities’ revenue goes down,” Cox said. “Those entities use the total property value to set their mill levies.”

Colorado’s assessor’s offices reappraise their county’s inventory of property every two years. This year is a reappraisal year, which means on May 1 Cox will be notifying residents to disclose the value of property for tax purposes.

Residents have until June 1 to protest the valuation, a process Cox expects this year will be widely used by those who expected to see their value drop with present market conditions.

Once the protest period has passed, Cox notifies the taxing districts in August to share the value of their taxable inventory. The districts have until mid-December to certify their mill levies. Certification establishes the mills each taxing entity will levy against the properties in its district, based on the cumulative value of the inventory they have to work with.

That value is incorporated into an equation that tells the county’s taxing districts what they can expect in property taxes, given their individual mill levies. Those mill levies can fluctuate from one year to the next, Cox said.

Douglas County reports that in 2008, 154 taxing entities maintained the same tax rate from 2007, 28 entities lowered their tax rate from the prior year and 38 increased their tax rate.

Among the mill levies in Douglas County that have fluctuated in years past, the Douglas County School District mill levy went from 46.5 mills in 2007 to 47.103 in 2008. The library district moved from 4.044 mills in 2007 to 4.052 the following year.

In the last 10 years the school district’s mill levy has fluctuated between 51.068 mills and 43.584, while Douglas County has since 2001 maintained a steady mill levy of 19.774 mills.

Some residents will see a handful of mill levies listed on their tax bills, while others face more than a dozen. In some cases, neighbors can find themselves with different tax bills, depending on when they moved in.

For a phased development, such as Founders Village in Castle Rock, separate metropolitan districts were created to build and maintain the infrastructure serving certain phases of the development. As a result, Founders residents who compare their tax bill to that of their neighbors can find variations in their mill levy.

Keeping track of all those numbers is no small task for Cox, who takes a proactive position to educate the public about the symbiotic relationship between the reappraisal, property values and the resulting tax bill that arrives the following year. Cox and representatives from her office conduct ongoing educational presentations to answer questions about the process.

This year Cox expects those questions to increase as residents review a valuation that reflects market value during the 18 months preceding June 30, 2008 — the mandated timeline for this year’s reappraisal.

With the drop in home values since last summer, those who expect to see the market decline in this year’s valuation will be sorely disappointed, she said.

Any potential decline is not expected to hit the tax bills for another few years, following the 2011 reappraisal period.

That is when many taxing districts expect to see today’s economic woes hit their property tax revenues, plenty of time to brace for the impact, some say.

The Douglas County Library District is among those taxing districts that rely heavily on property taxes for revenue. Following two back-to-back voter denials for an increased mill levy, and expecting a drop in revenue because of declining property values, the district is planning now for future impacts.

Unlike taxing entities that rely on sales tax income — which hits hard and fast when spending is tight — a district that relies on property taxes has more time to prepare for hard times, said Jamie LaRue, director of the Douglas County Library District.

“Our budget problem is not nearly as bad as those whose revenues fluctuate more quickly,” LaRue said. “Property taxes are great because we get so much advance notice.”

Douglas County is on the same page with a financial plan built to absorb the potential decrease in revenue.

“We’ve predicted revenues fairly closely,” said Andrew Copland, Douglas County director of finance. “We’re living within our means and we have time to react to the [property values] as we need to.”

Douglas County relies on property taxes for more than 40 percent of its income, but only comprises about 20 percent of the average tax bill. The largest portion of the county’s average tax bill goes to the Douglas County School District, which collects 45 percent of the property taxes paid by most taxpayers in the county.

Following voter denial of a 2008 request for a mill levy override, the school district is preparing to cut as much as $35.7 million from its budget through the 2010-11 school year.

More information about the reappraisal and the property tax regulations, visit the assessor’s Web site at www.douglas.co.us/assessor.

Taxation