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County ‘time trend’ portends a drop in property tax revenue

For the first time in at least 12 years, Archuleta County property tax assessments are subject to a downward “time trend” — a means used to devalue property peak value at the beginning of the current assessment period to current market values.

The purpose of the process is to align sale prices at the beginning of an assessment period to sales at the period’s end.

The downward time trend shouldn’t surprise Archuleta County residents, said Assessor Natalie Woodruff and, in fact, Archuleta County staff, as well as special districts throughout the county, are preparing for an expected property tax revenue drop in 2012.

For example, Woodruff said in explaining how the time trend works, if a parcel of vacant land in Lake Forest sold on July 30, 2008, for $20,000 and a similar lot sold on July 20, 2010, for $9,000, the time trend would apply a percentage to the earlier sale to compensate for the drop in sale prices to more closely align the sale prices for the assessment period — devaluing the property and bringing its assessed value closer to what the property would currently sell for.

The time trend will apply to different economic areas within the county where property sale prices saw steeper declines from the beginning to the end of the current assessment period, in order for values in those areas to be more accurately adjusted, Woodruff said.

For example, according to Woodruff, in the Pagosa Lakes area, residential property is subject to a downward trend of .92 percent per month, while vacant land is subject to 2.2 percent devaluation per month.

Aspen Springs vacant land will be subject to a 2.01 percent downward adjustment per month.

Outside of Pagosa Lakes, residential property may be subject to 1.49 percent per month, while vacant land outside of Pagosa Lakes and Aspen Springs may be subject to 1.32 percent per month.

Woodruff said there is a good possibility the next assessment period will also be subject to a time trend, depending on economic factors. An upward time trend is unlikely.

“A lot of things happened to help create our bubble, and will that perfect storm ever happen again? I hope not,” Woodruff said.

According to the state, only about six counties are seeing downward trends this assessment period, and those counties are home to resort communities.

Woodruff further added that, according to the state, other areas were subject to a downward spike during the last assessment cycle.

Woodruff added the caveat that less than half of Colorado’s 64 counties have been checked by the state for purposes of setting a time trend — a choice for counties that may want a second opinion or may not employ sufficient staff to analyze the needed information to determine trending needs.

Counties are only required to justify their trending to a state-hired auditor, Woodruff said, adding that the auditor had collected preliminary data from Archuleta County without seeing problems with the trending.

Woodruff added that various Realtors and other locals were consulted in determining the adjustment numbers

Additional information about expected property tax amounts and revenues to local government and special districts will be forthcoming as the assessor’s office prepares to mail notices of valuation in late April, Woodruff said.

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