Legislators should seek to ease burden on ranchers

Legislators should seek to ease burden on ranchers

November 29, 2001

In this distant corner of the state, elected officials have taken on — and won — a fairness issue that has statewide ramifications.

Montezuma County commissioners believed that the concessionaire in Mesa Verde National Park should participate in paying property taxes, as businesses operating on private land of course do throughout the county. Not only can the county use the revenue, but retail operations on government lands should not have a financial advantage over identical businesses off government lands.

In 1989 the commissioners began to tax the concessionaire, now called ARAMARK, for its use of property at Morefield Campground, Farview Lodge, and other sites in the national park. And while the company marshaled its arguments and refused, the courts eventually upheld the commissioners’ initiative. Assessments need to occur, and formulas need to be worked out to set leases’ remaining value, but soon lessees around the state will being paying appropriate taxes for the first time Included will be retail operations on other state and federal parks, and at the new Broncos stadium, for example.

It is uncertain how much revenue this will mean for Montezuma County annually, but it could be as much as $250,000.

Unfortunately, an unintended consequence is that ranchers with grazing rights will also be taxed on their use of public land. Because of the limited number of grazing rights, and the improvements lessees have made to them, grazing rights have value. And the Colorado Supreme Court has twice ruled that laws exempting any possessory interests from taxation violate the state constitution.

But we think this is an issue that State Sen. Jim Isgar and State Rep. Mark Larson can address. The state has consistently recognized that agriculture has statewide benefits and is not strongly profitable, and agriculturalists have for years paid considerably reduced property taxes on their acreages. More recently they have been excused from paying sales taxes on new and used equipment.

We would expect that the Legislature would agree that grazing leases should also be excused entirely, or to a large degree, from responsibility for this new property-tax application. Our legislators have two options: They can seek to amend the state constitution to allow ranchers to be excused from these possessory interests, or they can try to enact a law that would pass constitutional muster and still allow agricultural producers to pay taxes according to a different, more lenient formula than others who use public lands for profit. We prefer the latter.

The Montezuma County commissioners should be praised for recognizing this gap in the application of state law, and for taking it through the courts. As a result of their victory retailers on government land will begin paying more of their share of the cost of operating a county, and retailers not on government land will be competing on a more level playing field.