As Archuleta County staff prepares to mail out property tax notices of value at the end of the month, decreased assessed valuations indicate a sharp decline in property tax revenue for 2012 compared to 2011.
Estimates released by Archuleta County show a drop in assessed values of about $100 million in the county and a 26-percent average decrease in property valuations in the county from the previous assessment period, with some areas of the county seeing sharper decreases than others.
In 2010, the assessed value in the county rang in at just over $390 million dollars, with 2011 numbers showing just over $290 million.
Despite seeing a large decrease in valuations, Archuleta County Assessor Natalie Woodruff said the decrease is less than the 35-percent average originally anticipated.
Woodruff said, on average, vacant land assessed values decreased by 34 percent, while residential assessed values decreased by 26 percent.
In town, residential assessed values, on average, dropped 30 percent.
Woodruff also warned that, while values dropped 26 percent on average, some values may not have dropped, may not have dropped by the average amount, or may have dropped more than the average amount.
Woodruff additionally warned that people take into account the assessment period when analyzing their property tax valuations — the assessment period ended in June, when market values were still declining.
While perhaps better for the pocketbooks of the taxpaying citizens, decreased valuations also mean decreased revenue and tighter budgets for Archuleta County and special districts throughout the county, including Pagosa Fire Protection District, Upper San Juan Health Services District, the library district, Pagosa Area Water and Sanitation District and several metro districts.
The decline in assessed values equates to a revenue decrease of approximately $1.87 million for the county, said Finance Director Diane Sorensen, adding that property tax revenue is the county’s largest form of revenue at about 40 percent of all revenue received.
The county receives 18.233 mills (the amount of tax per thousand units of property value). With those 18.233 mills, the county funds general operations for 16 departments, road and bridge and the Department of Human Services, and provides contributions to Archuleta County Combined Dispatch, the district attorney’s office and San Juan Basin Health, among others, Sorensen said.
If the county allocated the same amounts to Road and Bridge and DHS as in 2011, the General Fund would see a decline of approximately $678,000, Sorensen said.
In efforts to reduce costs at the county, the Board of County Commissioners said no idea for cost savings has been turned down and that an e-mail address, email@example.com, has been set up for citizens to submit ideas to the county. Responses will be sent to the inboxes of the county commissioners and county administrator.
In addition to other revenue decreases, 1A funding, which was “de-Bruced” by the voters and allows the county to obtain revenue above TABOR limits, will take a hit estimated to be almost $1.2 million, Sorensen said.
The estimated decrease would mean the 1A fund would receive about $311,000 in 2012, down from about $1.5 million in 2011.
Additionally, Sorensen said to expect a decline in funding from both state and federal governments.
The largest recipient of property tax revenues in Archuleta County — the school district — will also see a significant decrease in property tax revenues, with any difference between current and a higher level supposed to be made up by the state government in an ideal situation.
Uncertainty remains, however, with expected revenue cuts from the state.
“It’s going to be hard, ugly, I suspect, but we’re going to do it,” said Commissioner Michael Whiting Tuesday, likening the situation to what families felt two years ago and noting that there were things the county had to do and things the county desired to do.
Because of the recession’s effect on property values, Archuleta County property tax assessments were subject to a downward time trend to align sale prices at the beginning of the assessment period to sales at the end.
For example, Woodruff explained, if 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 in order to more closely align the sale prices for the assessment period.
The time trend also caters to different economic areas within the county where property sale prices saw steeper declines in order for values of properties in those areas to be more accurately adjusted, Woodruff said.