I have been meaning to comment on this useful August 16, 2015 Denver Post article by Aldo Svaldi about a new property tax comparison report from SmartAsset.
The long and short is that Colorado has relative low property taxes, compared to most places in the US. In fact, the average property taxes in Colorado are about half of the national average. And, there is some variation within the state, in terms of effective property taxes.
The article skips most of the complexities of why and how we have low property taxes, and part of that is just a political culture to keep them low. But, there are important institutional factors, particularly the combination of the Gallagher Amendment, TABOR and the School Finance Act, that make them especially low.
Of course, low property taxes are good for homeowners, and especially so in a time when home values are rising quickly in metro Denver. But, there is an element of “you get what you pay for,” so that low property taxes can also mean minimal public services. This may be true in the current Colorado Springs discussion about whether to raise taxes to pay for better road maintenance.
Some governments might be more “efficient” in using residential property tax revenues to provide good public services. The report cited here computes efficiency by comparing the outcomes of school performance and violent crime rates versus taxes paid. In this calculation, Denver is #24 most efficient in the US. Scholars have tried to make similar comparisons, but generally find these simple measures to be highly flawed, since many other social and economic factors besides government spending influence things like school performance and violent crime rates. The Buechner Institute did a series of statewide studies of government efficiency a few years, and did find that Colorado, at the state level, is quite efficient by most comparisons of outcomes to taxes paid. But, adequacy and equity of services can still be important concerns for citizens.
The article’s discussion of Denver (and Colorado Springs/El Paso County) also didn’t mention that cities usually have lower residential property taxes, than suburbs, because they have large downtown commercial sectors that pay a disproportionate share of property taxes. With the Gallagher Amendment, this is especially true in Colorado cities.
When I moved here from East Coast a dozen years ago, I sort of thought the city of Denver had left a zero off of the property tax bill (not quite, really, but it was much lower than I expected). As the article notes, homeowners in Detroit and Milwaukee pay 4-5 times the property taxes of those in Denver, and many in the Northeastern US can pay almost an order of magnitude more.