Tuesday, June 24, 2008

Denver's Eroding Tax Base

You may recall that some time ago I called into question Denver’s ability to pay the interest for the enormous bond issue of Ref A, B, etc., estimated to be somewhere north of $1 billion.

Comments were made that included Denver’s stable tax base as a reason to have no fear. But recent events have revealed a scenario that I think will cause serious erosion of the City’s income from real property taxes.

What I’m reporting here are facts derived from public records. I chose these properties by searching on
http://www.recolorado.com/. I started at the low end.

AddressLast Assessed ValueCurrent Asking Price% Change
862 S. Patton Ct.$101,200$24,900-75%
2850 Jackson St.$126,000$24,900-80%
3644 York St.$240,500$35,000-85%
1815 E. 37th Ave$112,100$25,900-76%
4718 Vine St.$148,600$29,900-80%
1132 S Zenobia St.$150,500$34,900-77%
4915 Clayton St.$126,600$39,000-70%
3296 Cook St.$121,600$38,000-69%

See a pattern here? If these properties sell at or below the asking price, the property tax automatically falls by the same percentage (not taking mill levy into account).

First, what on earth were these City assessors smoking when they appraised these junkers at these outlandish values? Oh, that’s right, these assessments were done two years ago when they were all “high” on real estate frenzy. Whatever the reason, the newly named Manager of Finance (formerly Manager of Revenue) had best prepare for a drastic decline in revenue from property tax, a major source of income for the City.

As previously pointed out, giving away our tax rebate (Ref C) and signing up for $1,000,000,000 of new interest payments (Ref A, B, C, …) was a very bad idea. Hickenlooper must have known that the City was in for a thrashing when he was dancing with the Red Letters, but his ties to the developers drove him on.

No wonder Hickenlooper wants to sell booze in the parks. The people are going to need a lot of booze to forget what’s happening to them as the economy, both nationally and here in Denver, approaches the dimensions of a “Greater Depression”.

Don’t say you weren’t forewarned.


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