Businesses have a long list of expenses they have to cover before making a profit on the goods or services they sell to consumers. Those expenses include rent or mortgage, wages, supplies, advertising, insurance, and a long list of other overhead costs, all of which are costs built into the price paid by the end-user.
But one cost factor that some buyers may not consider is pass-through expenses from government, such as property taxes.
This is definitely a consideration when it comes to Jefferson County Issue 1A, which if approved by voters, authorizes an 18% county property tax increase, with businesses hit four times as hard as residential property tax payers.
The proponents have argued that we’re exaggerating the 18% county property tax hike. This is the same group that sabotaged the ballot notice book by submitting ridiculous-sounding against statements. Those shenanigans have confused voters.
The 18% county property tax increase is an easy calculation. Issue 1A asks you to increase the county mill levy to 21.478 from 18.239. That’s a 17.76% increase! We did round to 18%. Why the proponents even want to argue this fact is bizarre.
But back to business property taxes being impacted four times more compared to residential properties.
When property taxes are assessed there is a formula for residential and another for business property.
Residential Property A is valued at $500,000. Take the $500K and multiply it by 7.15% to get your “assessed value”. Then the assessed value is multiplied by the mill levy.
Business Property A is valued at $500,000. Take the $500K and multiply it by 29% to get your “assessed value”. Then the assessed value is multiplied by the mill levy.
7.15% versus 29% is a notable difference.
Why is this important to note? Any business that wants to keep their doors open and cover overhead is going to pass on the tax increase to customers, and under Issue 1A, that will be substantial.
Personally, I’m worried that businesses are going to be hit out of the blue when they get their property tax bill in January 2020.
What about businesses who rent commercial or retail space? They’ll get notice from the landlord and those higher property taxes will be passed along through higher rents, and eventually be passed along to the consumer through higher prices.
Businesses don’t get to vote. Businesses don’t get the ballot issue notice. Is ballot issue 1A even on their radar or are they focused on delivering goods and services to customers?
Jeffco is already allowed to increase county spending nearly 4% and has the revenue to do so. Issue 1A asks for an 18% county property tax hike and that price tag is too hefty, especially for those struggling to make ends meet.
Jefferson County ballot issue 1A is a two-punch hit on residents, and that is not obvious when you read the ballot language. Higher property taxes means both higher cost of housing, and an increased cost of goods and services. Carefully consider how much more you can afford.
Issue 1A doesn’t describe the real costs.
As a grassroots’ campaign to fight Issue 1A, we just don’t have the funding or manpower to reach every business and warn them. Our hope is that concerned customers will reach out to their favorite Jeffco stores and ask them to contact us to post a sign opposing the Jeffco Issue 1A 18% county property tax hike.
More importantly, your “no” vote can represent you standing up for local business owners who don’t get a ballot.
Natalie Menten is a Jefferson County resident.
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