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Heart of the Rockies Regional Medical Center in Salida. Dan Smith photo.

The Heart of the Rockies Regional Medical Center will be refunding more than two million dollars in property taxes collected as the district mill levy for the past four years under a resolution approved by the board of the directors Tuesday.

The board unanimously approved refunding $2,305,881 in taxes and interest under a resolution passed in open session after the board had reviewed the arrangement in executive session.

At the center of the issue is the Taxpayer Bill of Rights, known as TABOR, approved by voters in 1992, which requires voter approval for any tax increase, along with setting revenue and spending limits.

CEO Bob Morasko reported earlier that a board member questioned the propriety of the mill levy increases under TABOR last fall and an investigation by Fiscal Services Vice President Lesley Fagerberg found the District has been collecting property taxes in excess of the amount allowed by TABOR for many years.

Morasko earlier pointed out that thought there was nothing nefarious involved in the apparent two-decade long oversight, it had to be corrected.

An earlier district press release stated; “The mill levy the District imposed in 1992 for collection in 1993 should have been the District’s new mill levy limit, but the District continued its past practice of imposing a mill levy for operating purposes that did not exceed two mills.”

“Under a different state law,” the release continued, “a District’s property tax revenue cannot increase by more than 5.5 percent from the prior year. With this limit in mind (which limit was in place prior to TABOR), the District adjusted the mill levy up and down (but never exceeding two mills) to maximize property tax revenue.”

The issue, according to the press release, is that property tax mill levies, once decreased, cannot be increased again without voter approval. But regarding this specific requirement, the hospital district apparently did not request any elections.

Since the lowest property tax levy occurred in 2001, any increase in mill levy rates after that were in violation of TABOR, under which tax revenues collected above what is authorized are required to be returned to property taxpayers. However fortunately for the district, instead of refunding back more than 20 years of collections, the liability is limited to just the prior four tax years.