The checks are in the mail – or already delivered, but some people still have questions about the Heart of the Rockies Regional Health Center (HRRMC) property tax millage refunds.
Taxpayers in the hospital district; Chaffee, Fremont, and parts of Saguache counties, were set to receive refunds for excess mill levies over the most recent four fiscal years.
One of the HRRMC property tax refund checks received by a Salida resident. Dan Smith photo.
Multiple taxpayers in Salida reported getting checks that totaled a little over $122. There were no notices explaining why the refunds were made, just the term ‘Property Tax Refund’ and a parcel number on the check itself.
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.
An HRRMC 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 was collecting property tax millage in apparent violation of TABOR rules for multiple years.
In January, HRRMC approved refunding more than two million dollars in property taxes collected as the district mill levy for the past four years. TABOR also sets revenue and spending limits. It also requires refunds for any excess tax levy.
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.
Allison Gergley, Director of Marketing and Pubic Affairs, told Ark Valley Voice the number of taxpayers in the three counties receiving refund checks was estimated to be between 19,000 and 21,000. The total refunds came to $2,305,881 ($1,819,537 in principal and $486,344 in interest). There was no initial information on the cost of mailing those thousands of checks.
Some taxpayers wondered about how the refunds were applied for properties of different valuations in the three-county area, some questioned similar refunds for properties taxed at different rates because of varying valuations by assessors.
Last fall, an HRRMC board member questioned the propriety of the mill levy increases under TABOR and an investigation by Fiscal Services Vice President Lesley Fagerberg found the District was collecting property tax millage in excess of the amount allowed by TABOR for many years.
CEO Bob Morasko earlier pointed out that while there was nothing nefarious involved in the apparent two-decade-long oversight, it had to be corrected.
Since the lowest property tax levy occurred in 2001, any increase in mill levy rates after that were probably in violation of TABOR, and refunds were necessary.
An earlier district press release explained; “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 earlier 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.”
Property tax mill levies, once decreased, cannot be increased again without voter approval. But the hospital district did not request any such elections.
Since the lowest property tax levy occurred in 2001, (1.135 mills) any increase in mill levy rates after that were probably in violation of TABOR. That would require that tax revenues collected above that must be returned to property taxpayers.
Fortunately for the district, instead of refunding back more than 20 years of collections, the legal liability was limited to just the prior four tax years (2018-2021). The mill levy in 2018 was set at 1.944 mills in 2018, 1.787 mills in 2019, 1.870 in 2020 and 1.672 in 2021.
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