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Assessor correctly applying state law in calculating and allocating base and increment valuations in tax increment financing areas
A recent court ruling in support of the Arapahoe County Assessor affirms the Assessor’s Office is correctly applying Colorado law when calculating and allocating base and increment valuations in Tax Increment Financing areas, or “TIFs,” under Colorado’s Urban Renewal Law.
In 2018, the Aurora Urban Renewal Authority (AURA) sued Arapahoe County Assessor because it disagreed with the Assessor’s TIF valuations, claiming the Assessor’s calculation and allocation of base and increment valuations was based upon a misinterpretation of state law, and that the base valuation had to remain “frozen” rather than be proportionately adjusted in conjunction with the property tax reassessment cycle.
TIF is a tool municipal governments can use to finance the redevelopment of blighted property. In order to revitalize a blighted area, cities can divert property taxes that would have been collected by counties, school districts and special districts for up to 25 years to help pay off the costs associated with urban renewal. This is known as Tax Increment Financing because the development is financed with the incremental property tax increase that development adds to the pre-redevelopment tax base.
Following instructions set forth in the Assessor’s Reference Library that was prepared and published by the Colorado State Property Tax Administrator and Division of Property Taxation (the “PTA”), the Assessor regularly revalues the properties with the TIF areas and annually certifies the base and increment valuations to the applicable urban renewal authorities and other taxing entities, which they then use to calculate their mill levies.
AURA sought to divert more tax revenue from the taxing entities in these TIF areas than provided for under the interpretation of Colorado law shared by the Assessor and PTA.
In her June 10, 2020 ruling, Arapahoe County District Court Judge Elizabeth A. Weishaupl agreed with the Assessor’s and PTA’s interpretation of the Urban Renewal Law, ruling that the term “general reassessment” in C.R.S. § 31-25-107(9)(e) “refers to the regularly occurring revaluation of property” and that the TIF base and increment valuations must be proportionately adjusted in accordance with property tax revaluations.
The Aurora Urban Renewal Authority has until July 29th to appeal this decision.
Assessor PK Kaiser states that his office will continue to work closely with all urban renewal authorities, school districts, other taxing districts, and taxpayers to ensure all state statutes and property tax laws are properly followed. He added that the Assessor Office is open to talk about the explanations of the assessor working procedures.
View a copy of the court ruling.