PROPERTY TAX REVENUE

Computing the Property Tax Bill

The formulas used for computing residential property taxes for 2022 assessments are as follows:

Assessed valuation = Property market value x Assessment ratio

Property tax = Assessed valuation x Mill levy / 1,000

For the 2022 residential assessments paid in 2023, the owner of a home valued at $500,000 would have paid $93 in property taxes to the Town of Parker and $2,758 to the other governments common to all Parker taxpayers.

Using the 29% business assessment rate, a business with a market value of $500,000 would have paid $377 in property taxes to the Town of Parker in 2023, and $11,185 to the other governments common to all Parker taxpayers.

Legal Restrictions

The Taxpayer Bill of Rights (TABOR) Amendment to the Colorado Constitution limits property tax revenue growth to the amount collected the previous year increased by the Denver-Boulder Consumer Price Index and a local growth factor; however, Parker citizens have voted to exempt the Town from the revenue limit provisions of TABOR. TABOR also prohibits any increase to the mill levy except by election.

Until 2020, the Gallagher Amendment to the Colorado Constitution restricted property tax growth by requiring the legislature to annually adjust the residential-assessed valuation rate to ensure that the proportion of residential to total state-assessed valuation remained constant. Due to residential growth and market values rising relative to commercial market values, the residential assessment ratio decreased over time from 21% in 1982 to 7.15% in 2021. The commercial property rate remained at 29%. Voters repealed the Gallagher Amendment in 2020, and the legislature froze the assessment rates for both residential and commercial properties; however, the rate has been temporarily lowered to 6.95% for 2022 and 2023. This will affect collections for 2023 and 2024.

Finally, there is a statutory limitation which prohibits property tax revenue growth from exceeding 5.5% each year, adjusted for new construction, although it is generally held that home rule municipalities, like Parker, are exempt from this provision.