District Taxes: A Breakdown
Special District Taxes can be confusing. Who am I paying taxes to? How are my taxes broken down? How are they calculated? How much of my money is being invested back into my District? The questions can be daunting, and the answers difficult to find. We hear you, and we're happy to help clear the fog.
First, let's talk about how District Taxes are determined. When bonds are sold to investors, the District makes a pledge to pay back the borrowed money at an agreed upon interest rate. The Special District has legal authority to establish and collect property tax on the properties within its boundaries to redeem the bonds.
The property tax levy is the rate of tax applied to the assessed value of all the property within the District's boundaries. The annual levy generates tax revenue that the District will use each year to pay for providing the various services to its residents, and to pay debt service.
The formula is: Mill Levy x Assessed Value = Tax Dollars
For example, if the total assessed value of all property in a special district were $10,000,000 and the district’s tax levy were 25.000 mills, the district would collect $250,000 in annual property tax revenue.
(25.000 mills/1,000) x $10,000,000 = $250,000
For a house with a market value of $300,000, this example mill levy would generate $536 in annual property tax revenue for the district.
(25.000 mills/1,000) x ($300,000 X 7.15%) = $’s
(.025) x ($21,450) = $536
Special District mill levies may fluctuate. Decline in a district’s assessed value, for instance, would lead to a decline in property tax revenue if the mill levy stayed the same from year to year. In this case, the District may seek a mill levy increase in order to preserve its revenue. Districts may also seek a mill levy increase to finance capital projects, but after the project is completed, they may lower the mill levy to previous levels.
What resopurces are available to residents to determine their personal tax obligation? What if a resident wants to see how their taxes are broken down? One of the best tools to use when trying to get to the bottom of District taxes is the Larimer County Assessor site (Linked here): Property Search | Larimer County. This site will caluclate and provide your tax obligation and display what entities your payments are funneled to.
For those simply interested in seeing this breakdown, the following image reflects an example of the 2024 Mill levy for Kinston Metropolitan District No. 2.
