by Matie Belle Lakish
The reassessment of properties by the Saguache County Assessor’s office, under the direction of the Department of Local Affairs, Division of Property Taxation, drew about 50 Crestone and Baca residents to a meeting on July 31. State Senator Larry Crowder and Representative Ed Vigil, as well as representatives of the State Division of Taxation also attended.
Many residents, especially of the Town of Crestone, felt that the new values placed on their properties are excessive, and not representative of the true market value. Elaine Johnson, especially, said that taxable values on many properties had gone up over 1000%. Several protested that the town economy, and especially wages, are not strong enough to allow residents to pay the taxes that would result from the new assessments. Others noted that all residential lots were assessed at $7,000, and all commercial lots were assessed at $40,000, even though there is a great deal of variation in lots.
JoAnn Groff, Property Tax Administrator for the Division of Property Taxation, explained that “Mass Appraisal” is the approved way of assessing property across the state, and that means that assessors must give an equal value to an equal class of properties. It is what allows assessors to do “lots of properties in a short time”. She suggested that the way to handle variations is to appeal to the County Board of Equalization (CBOE), in this case the county commissioners acting in that capacity, who can make changes to a valuation if they judge it to be incorrect.
On the following days, August 1 and 2, twenty-four property owners representing a number of properties, mostly in Crestone and the Baca, did just that. Protests ranged from inconsistencies in Casita Park lot values within the same cul-de-sac to huge disparities between similar business properties across the county. Elaine Johnson, attorney and owner of several properties in Crestone, said that in many cases, “none of the statutory case law requirements were met.” She contended that the sample used for commercial properties did not meet the requirements for “comparables” because the sample was too small, as only two sales in two years were used. Other transactions were thrown out for various reasons, which, objectors contended, led to an artificially high value of $40,000 per commercial 50 ft. lot. Residential lots went from around $1200 per lot to $7,000 per lot. There are three types of residential lots in Crestone defining how many lots are needed to build a home on. “High density” only requires one 50ft lot, whereas “low density” requires three 50ft lots to build. All were valued the same. Twentyfive ft. lots were valued for half of the 50ft lots, even though they are unbuildable, according to Crestone zoning regulations.
Bill Folk objected to his Baca home being taxed as commercial because of a B&B in his guest house. He said it brings in less money than his increase in taxes from residential to commercial. He strongly objected to the fact that he has tried for years to get his property on the tax rolls, but without success. This year, he was charged for two years of back taxes, plus the 2012 taxes, which are now due.
After two days of testimony, commissioners, acting as the County Board of Equalization, had one week to analyze the information and issue a ruling on the protests. Each decision was mailed to the owner without the information being made public. In an Eye on the County piece, however, Commissioners Linda Joseph, Jason Anderson and Ken Anderson reflected on some of the concerns raised.
“In recent property reappraisals of some 15,000 parcels in Saguache County, conducted by state personnel in conjunction with the Saguache County Assessor’s Office, it was found that some parcels of land in the Town of Crestone exchanged hands at prices that were significantly higher than in the past. This was a primary factor resulting in higher land values for Town of Crestone properties, and in turn created a great deal of concern about a tax increase. While some land values rose, there are numerous other factors in the equation used to calculate taxpayers’ bills. Whatever the % increase was in the value of the land, or infrastructure, is not automatically the same % increase in taxes.”
In further reflections, commissioners continued: “The State system is complex, making every attempt to accurately assess and to equalize taxation across the entire State. But, erratic free market behavior in land sales, such as Crestone has seen, can have an impact on land valuation in such a small community.
“In studying these issues, it appears that taxing districts falling outside the State’s equalizing range is rare. Many factors are accounted for, to exclude transactions that artificially skew values, such as family members/friends exchanging land with little or no sale price, higher prices often paid to purchase an adjacent lot, and foreclosure sale prices. And yet, excluding these caused the town and it’s taxing district to have, at the State’s own admission, ‘insufficient comparables’. Unfortunately at this time, there are no alternate methods to address such circumstances. Larger places and the free market do seem to equalize fairly well, or absorb boom and bust volatility better. The lack of resilience of such a small community as Crestone in these regards, brings up the question—Is it time for the State to address this situation, even if it is a rare occurrence?
“In various forums of Government working with the State level, it is an ongoing discussion that—even when they truly care, and really try, and have had some rural experience, the systems are geared to urban/suburban scenarios, and don’t really understand and address rural/frontier realities. The question for Saguache County with regard to taxation—is there a case to be made, and, proposals to offer, that warrant bringing to our State Legislators and Governor?”
In a further description of their review process, commissioners said, “So far, a solution for how to better equalize for disparate property values in Crestone has not been found. With “insufficient comparables” cited by the state, the CBOE first looked to expand the sample size, by going out further across the county. This effort offered no relief. Larger towns and some other unincorporated areas in Saguache County are already assessed at higher levels than Crestone. The board next tried to expand the time frame from 2 to 5 years, and eliminated the highest and lowest values. This yielded a few additional comparables to justify adjustment, which the CBOE made across the commercial property in the Town of Crestone.”
As a result of their deliberations, “the CBOE made a further reduction in the base value of commercial property in Crestone as a class, to $36,850.00.” There is concern, however, that this figure is “out of the broad range within which the State equalizes. Ordinarily this and several other avenues the BOE looked into are resolved by . . . a reappraisal!” Since a reappraisal has just taken place, and the state supervised, it is unclear what the state’s reaction will be to this action taken at the local level. “To challenge the state on its reappraisal, an informed case must be made that there is an extreme experience in this town that justifies new and different solutions than what seems to work for the rest of the county and state. Changes to systems, measures and rules for extreme rural, extremely small communities, would be required.”
Regarding individual property differences, they said, “Factors such as terrain (slope and features that impact development), and age and condition of buildings can lead to individualized adjustments. These are meant to be picked up in the protest period, which is the opportunity for citizens to bring forward any information that requires closer consideration for an adjustment. The Assessor’s office will be conducting an individualized look at some protestor’s properties, to see the circumstances they brought forward in the meeting with the County Board of Equalization – CBOE (Commissioners). Because of the disparities arising in Crestone, the Assessor’s office will do a site review of ALL parcels in the Town of Crestone.”
Commissioners noted the technological problems encountered in doing the assessment due to internet connectivity in our remote areas, and the extra time that was required to complete the assessment. “Perhaps most maddening to all, is that meanwhile, we await the information needed to answer that most burning question of property owners, the Town, and the County alike–what is the average Tax Increase? And is there really a systemic problem to tackle?”
Commissioners offered the following “Next Steps”:
“For Protestors who are not satisfied with the findings/decisions of the CBOE and wish to continue your appeal, you must do so within 30 days of the date of the County Board’s written decision, to the Board of Assessment Appeals or District Court.
“For the Town of Crestone, some creative possibilities within their authority may exist. Researching options such as allowing lot consolidation, or refining commercial zoning to include additional categories with different development parameters may offer some solutions.
“The CBOE and Assessor’s office will continue looking deeply at the facts on the issue. Is the system failing the Town of Crestone? Are there other local solutions available? Is an appeal by the Town and County to the State warranted? If so, the challenge, and the opportunity, is to identify what would work better.”
Assessor Stephens, in a report to commissioners on August 19, said extra taxes are likely to be collected on 353 omitted properties (out of 15,000). 80% of owners’ taxes went down, while 20% increased. Total revenues, if all owed were to be collected, an almost impossible feat, would yield $1,299,410. An increase to estimated taxes, due to the reassessment, is $72,014. These figures are NOT final. Final numbers will be available in December. In 1996 the county passed a de-Brucing referendum, so any new funds generated can be retained and used locally.