First, you should know that only approximately 23% of the total property tax you pay each year goes to the city. The city has no control over the remaining majority of what you pay to other entities such as Alpine school district, which collects the largest portion.
When it comes to the city’s portion, there are generally two approaches cities use to determine how much tax you will pay each year. The first and most common approach is for the tax rate (or percentage) to adjust each year as property values change, so that the total tax collected by the city is approximately the same every year. Each year the County re-estimates property values and then calculates what this tax rate should be so that the revenue collected by the city remains constant. The benefit of this approach for residents is that you will pay about the same amount of city property tax every year, regardless of the value of your property. The benefit to the city is that revenues stay consistent whether home values go up or down.
The second approach is for the tax rate to stay the same regardless of changes in property values. This means when your property values go up you pay more in taxes, and if your property values go down you pay less in taxes. One of the problems with this approach is that if property values go up significantly during a bubble, the city can receive much more revenue, leading some to worry that government could needlessly expand during these times. In addition, the constant fluctuation of tax revenue makes it difficult to budget each year for city services, causing some services to be cut if revenues go down.
A particularly difficult problem for some cities occurs when they reduce rates if property values go up (to avoid expanding government), but then hold those rates low when property values go back down. This has caused some cities to fall many years behind in basic services, such as road maintenance, causing them to have to propose steep rate hikes to make up the shortfall.
The City Council has chosen to adopt the County’s calculated tax rate so that revenues to the city stay constant. This means the portion of your property tax to the city should be approximately the same as it was for the past fiscal year. Overall, property values have increased, which means the tax rate will go down from .002873 to .002410.
More detailed information will be coming out in our annual State of the City Report in September. In the meantime, feel free to contact any member of the City Council with questions.
—Jenney Rees, City Council