Officials say hikes necessary to offset declining oil and gas revenue
FARMINGTON — San Juan County residents are blasting local governments and school districts because property taxes are rising, but local officials don't set the rates, the county's executive officer said.
"The state is who sets the rate," Kim Carpenter said, describing the county as a clearing house. "We validate and verify those rates."
The rates generally are going up because local agencies must find ways to make bond payments as tax revenue from oil and gas production has declined. The state sets the rate to ensure there will be enough revenue to make the payments and local officials confirm their accuracy.
In a meeting Tuesday evening, the county commission confirmed that the new state-approved property tax rates — or mill rates — were accurate. The county treasurer's office will use the new rates to calculate the next round of property tax bills.
While most rates are rising, some are decreasing. Bloomfield's rate, for example, dropped by .262 mills because the city doubled its size in a December 2013 annexation. That has allowed it to tax more property at a lower rate.
But the city's school district also needs revenue to make payments on its bonding debt, and essential funds from oil and gas production have declined. So to compensate, the school district's rates rose by 1.017 mills.
Bloomfield residents who own homes valued at $150,000 will now pay $37.75 more in property taxes annually, which is because of the increase in the school district's rate.
Declining revenues from oil and gas production are also the biggest reason many other rates in local governments and school districts are rising, Carpenter said.
The process to adjust property tax rates happens each year. It begins in January with the county assessing the values of most properties within its boundaries. The state around this time assesses other properties, typically gas lines, power plants and other industrial sites.
Cities, school districts and the county meanwhile crunch numbers to see if they need authorization to raise property tax rates.
Then all of this information goes to the state, which runs it through quality-control formulas. Part of this process determines whether the local governments and school districts need to raise, lower or maintain their rates.
If the information the state receives checks out, it sends a certification for all local governments and school districts to the county. The county then sends the certification to the taxing authorities where officials check the calculations.
If no problems are found, then the county commission must confirm that the document is accurate — which it did Tuesday evening for this year's rates — before it can send it to the county treasure's office. Once in the treasure's office, the new rates are used to calculate ensuing property tax bills. The office will begin mailing those in the next few months.
County Commissioner Scott Eckstein — also Bloomfield's mayor — said constituents were calling him during most of Wednesday upset about the property tax increases. But local governments don't have much control over it, he said.
"Those payments have got to be made," he said.