Jefferson County financial picture not yet impacted by COVID-19 but existing challenges remain

Jeffco’s reliance on property tax means impact could be felt in future years

Paul Albani-Burgio
palbaniburgio@coloradocommunitymedia.com
Posted 4/27/20

While city officials in Golden, Wheat Ridge and other Jeffco cities are making plans to tighten their belts in response to major COVID-related hits to city revenues, Jeffco isn’t seeing a major …

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Jefferson County financial picture not yet impacted by COVID-19 but existing challenges remain

Jeffco’s reliance on property tax means impact could be felt in future years

Posted

While city officials in Golden, Wheat Ridge and other Jeffco cities are making plans to tighten their belts in response to major COVID-related hits to city revenues, Jeffco isn’t seeing a major impact from COVID-19 on county revenues

So says county manager Don Davis, who explains the differing situations ultimately comes down to the fact that city revenues come from sales tax, highly impacted by social distancing, while Jefferson County gets most of its revenue from property taxes.

“When you look at the county budget it depends on property taxes, which are based upon evaluations from the assessor, so it doesn’t have the same volatility of effect that sales tax does,” said Davis.

But the county’s reliance on property tax revenues also means it could see the economic damage of COVID-19 come to bear in two years — after properties are reassessed.

In Colorado, property taxes are paid based on the value of a property as it is assessed on the last day of June in every even numbered year. Those valuation notices will be sent in May of the next year with residents then paying taxes calculated based on those assessed valuations for the next two years.

“That means if values go down because of COVID-19, that reduction of value will be reflected in the notices of value sent in May 2021 and the taxes paid in 2022 and 2023,” said Jeffco Assessor Scot Kersgaard.

Treasurer waives property tax interest

But while Davis said the county is not expecting to see a drop in property tax revenue, Jeffco Treasurer Jerry DiTullio said his office is waiving interest on late property tax payments and allowing those payments to be broken up into multiple installments to help ease the burden on property owners who have been facing property tax bills just as they are facing job losses and other financial challenges related to COVID-19.

The state allows property taxes to be paid in one payment due April 30 or in two payments, with the first due on March 2 and the second on June 15. However, the governor enacted an executive order allowing to waive late interest and accept multiple payments. DiTullio has since sent a letter to the governor asking him to extend the order through at least June 20.

“Normally late interest is a hammer to get people to pay their taxes on time in this case we are trying to use the waiving of the interest on the payment as a carrot to help taxpayers make their payments,” DiTullio said.

DiTullio also said that while the county will likely receive some late payments as a result of that policy, he does not expect them to have an adverse impact on the county’s overall finances.

Davis said that while the county has also faced some unexpected costs relating to COVID-19, those costs will not be an issue for the county because the Federal government is going to reimburse counties for such expenses. In Jeffco, those expenses have included the cost to the sheriff’s office of reopening the seventh floor of the jail to house inmates showing symptoms of COVID-19 and the cost of PPE for first responders.

But at the same time, the county has also saved money in a variety of ways during the pandemic, including from less usage of gas and office supplies from county employees now working at home. Overall, 2/3 of county employees have been working from home while about 1/3 have continued to work on-site.

Fairgrounds events canceled

One aspect of the county’s operations that has been heavily impacted by the pandemic situation is the county fairgrounds. All events scheduled to be held at the fairgrounds have been canceled and organizers have been given a refund. Davis said being unable to host events at the fairgrounds does “have an impact on the budget” but the county will have to wait and see how long the shutdown of events last to evaluate how much of an impact that will.

Davis said he “doesn’t really see events taking place at the fairgrounds anytime soon” as restrictions on large gatherings will likely remain in place even after the county’s stay-at-home order is lifted. However, the inability to host events at the fairgrounds during the pandemic will not have any impact on the county’s preexisting plan to scale down operations at the fairgrounds while maintaining operations supporting agricultural, equine and youth activities but not rental for private events in response to budget challenges that predate COVID-19.

Although COVID-19 has not added additional financial strain, Davis said the county is still anticipating needed to make budget cuts in 2021, although he said he is feeling optimistic that those cuts will not have to be extreme. However, he said it will probably be a month before the county has the 2019 revenue numbers it will use to set its 2021 budget.

Davis also said that while the county expects property tax revenues to remain stable this year, many in the county are and will continue to experience economic hardship as a result of the crisis.

“There is no doubt that there will be businesses that will shutter and things that will change,” said Davis. “I think it is going to be really hard for those businesses that are people businesses. How do we maintain six feet of social distancing and go to a restaurant or brewpub?”

However, Davis also said he feels the county’s diversified economy has put it in a better position than communities that are more reliant on a few industries and said he is confident the county and its economy will make it through the crisis.

“Throughout our history we’ve adapted and every time we’ve gone through something like this we’ve come out the other side,” said Davis. “Maybe a little beat up and bruised but we come out stronger.”

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