Lakewood to Increase and Overcollect Property Tax – Again

Including explanation from Bob Adams

Lakewood will vote on a property tax increase on Monday. This will be done through the normal budget appropriation and mill levy certification. It is not called a tax increase anywhere. However, the 2025 Budget Book,  page 62, explains that a temporary reduction in the mill levy rate will lapse in 2025. As a result, Lakewood residents will pay 6% more property taxes and Lakewood will collect an extra $15.5 million in 2025.

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In 2023, former Councilor Mary Janssen fought to get Lakewood to comply with the Lakewood City Charter and only collect revenues that are legally allowed. That equated to a property mill levy rate of 3.85%. Lakewood Charter has a revenue cap, not a tax rate cap, to protect its residents from windfall taxes, like abrupt property assessment increases. City Council did not agree to Janssen’s original proposal, but they did lower the mill levy to 4.28 mills.

For one year.

Now that year is up.

On Monday, the Council will vote to approve the full mill levy of 4.711 mills, thereby increasing the rate by 0.431 mills from 2024.

Your property taxes will go up again this year.

“Natalie Menten, board director with the Taxpayer’s Bill of Rights (TABOR) Foundation, emphasized the importance of TABOR’s protections: ‘According to paragraph 7(c), the maximum annual percentage change in each district’s property tax revenue equals inflation in the prior calendar year plus annual local growth (new construction). That safety cap protects taxpayers and gives very sufficient additional revenue to government agencies. Voters shouldn’t waive any tax revenue cap unless it comes with the 4-year sunset prescribed in TABOR.”

In 2023, then-Councilor Janssen found out Lakewood revenue from property tax was increasing 12.87%. The City Charter only allows for a 7% increase in revenue growth (see City Charter 12.12)

“Growth from projected 2023 to projected 2024 Property Tax Revenue is 12.87%”- Holly Björklund, Chief Financial Officer, Lakewood, 2023

Lakewood will increase property tax revenues over the amount permitted in charter, as they have in previous years, while advocating to keep your TABOR refunds.

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Explanation of Overcharging from Bob Adams

Every two years (odd numbered years), Colorado requires all real estate to be reappraised.  This was done in 2023 and resulted in a huge increase in property valuations.  This reappraisal applied to property taxes paid in 2024.  The Assessor uses the newly appraised county real estate inventory to prepare a report of the assessed value which is provided to all county tax authorities.  Based on that report, the tax authorities are supposed to calculate the overall mill levy needed to provide services (pay their budget) for the following year.  The approved mill levy is then used to calculate individual tax bills.

As published by the Colorado Division of Property Taxation:

“Each year county commissioners, city councils, school boards, governing boards of special districts, and other taxing authorities determine the revenue needed and allowed under the law to provide services for the following year.  [In other words, prepare a budget]

Each taxing authority calculates a tax rate based on the revenue needed from property tax and the total assessed value of real and personal property located within their boundaries. The tax rate is often expressed as a mill levy.”

Source:   (https://spl.cde.state.co.us/artemis/locserials/loc811internet/loc8112022internet.pdf)

If the law was followed properly, there would be only a minimal tax increase.

However, Jefferson County and nearly all county tax authorities, including Lakewood, failed to adjust the mill levies downward to equal their budgets.  Even Governor Polis sent a letter to all tax districts urging them to reduce mill levies.  Most refused.  Instead, nearly all kept a higher mill levy which resulted in property owners being overcharged and the districts received a huge windfall in increased tax revenue.  Now, of course, the city and county have introduced ballot measures to allow them to keep and spend the overcollected tax revenue this year, next year and every future year. and eliminate all other revenue caps so they can freely raise taxes without a vote of the people now required by TABOR.

This is the cause of how tax revenues were overcharged and overcollected.

See more from Bob Adams on nextdoor.com

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