Opinion by Publisher Jordan Hedberg
For the first time since the short-lived silver boom in the late 1800s, Custer County has the opportunity to finally have the financial resources to pay for the services it provides to its local citizens. For most of the month of May, local property owners have been trying to cope with the sticker shock that came with the notice of the 2024 estimated property taxes. Despite the increase in property values and the automatic increase in property taxes, Custer County has one of the lowest residential property tax rates in the United States. Few realize that residential life in the Wet Mountain Valley is subsidized with money that comes from outside of the county.
For the past seven years, I have reported on hundreds of different government board meetings, and each grapple with how to provide services to citizens that cannot be paid for with local tax revenues. Because the population in the region is less than 5400 people year-round, and there is no notable economic export, Custer County receives about half of its needed revenue from outside the region. Federal Payments in Lieu of Taxes (PILT), state grants, fuel tax, and direct payments for students cover the deficit in yearly local budgets. Yet, this just covers cashflow shortfalls; the Custer County government covers most of its shortfalls by not replacing or maintaining its infrastructure and providing wages that always lag behind the cost of living in the region.
Unlike most businesses, governments in Colorado are allowed to budget using cash-basis accounting, which means that it does not account for things such as depreciation or other unfunded future obligations. When a street or a building wears out and needs to be repaired or fixed, there is no account that has been created that has been dutifully saving money in anticipation of that repair or rebuilding. The result of this type of budgeting means that governments pay for current services by consuming their capital base over time.
When reality finally catches up to a crumbling school, road, or wastewater treatment plant, the local governments are forced to apply for emergency grants and loans and hope that some state representative earmarks money to help: money that is paid for by Federal debt or money printing. If federal funds fail to materialize, which often happens, the local government is forced to issue bonds and borrow the money, forcing future generations to pay for the lack of planning of the present generation. Our society has embraced a strategy of kicking the debt and deferred maintenance down the road for other generations to handle rather than acknowledge that we are not paying for what we use.
By luck (and the questionable decisions of the Federal Reserve suppressing interest rates to zero for the past 13 years, causing the increase in property values), the people of Custer County have an opportunity to finally pay honestly for the public services they consume. Property taxes do not go to some far-flung state or national government; they stay here in Custer County. Next year the local budgets could increase by a third, and several million dollars of increased revenue can go to paying for the degraded infrastructure of the region.
A short list of projects would be making sure Round Mountain has the money to build the needed wastewater treatment plant. Plans to repave local county roads and build the new landfill. The volunteer fire force could be transitioned into a paid and professional force. Law enforcement and EMS services could be paid a wage that allows them to live in the place they serve. Teachers who have children could have the time to raise infants rather than return to school a week after giving birth. Workforce housing and needed reforms to local zoning laws could actually be achieved.
The Valley has paid a lot of lip service to the conservative values of running a balanced budget and resisting money and the strings that come attached to federal funds. But that lipservice has never translated into meaningful action by elected leaders in the many government bodies that operate within Custer County. Instead, the area cannibalizes itself from the inheritance of the core business district that makes up Main Street in Westcliffe and parts of Silver Cliff. Those businesses, buildings built over a century ago, are still the economic foundation of this area. While hard to estimate exactly, between sales and property taxes, commercial properties contribute around 75% of all tax revenues in the area. And despite this contribution, a majority of residents buy from businesses down the hill.
As a community, we could finally stop saying, “we don’t have the money” for basic public services.
The conversation about property taxes should be reframed as an opportunity to invest in the place that we call home. And with proper investment and with a change to accrual accounting by local governments, we can create a foundation of economic prosperity in the Valley that will be enjoyed by the current generation but also by the generations that will follow.
Civic pride, not personal remorse, should be the goal of the conversation that revolves around property taxes.
