Denver homeowners will pay more in school taxes next year even though Denver Public Schools (DPS) slightly lowered its overall tax rate.

The increase is being driven by rising assessed home values, a full 52.142-mill levy and a dramatic increase in the district’s abatement surcharge – the fee DPS uses to recoup “historically high” tax refunds granted to property owners this year, according to a district report.

“Property values have rapidly increased in Denver,” said Chuck Carpenter, the district’s chief financial officer.

An abatement occurs when property owners successfully challenge their tax bills and receive a refund. When this happens, the district must make up the difference the following year by increasing the abatement portion of its mill levy — shifting the cost of those refunds onto other taxpayers.

DPS officials said refunds issued this year were unusually high.

The reason?

Slower tax payments and more disputes, Carpenter said.

For the median single-family home in Denver, the DPS portion of the property tax bill is expected to rise from $2,105 to $2,297 — about a $192 increase.

But many taxpayers will pay more.

That’s because the “median home” is a statistical midpoint — half of homes are worth more, half less. Individual tax bills vary based on each property’s assessed value, which changed unevenly across the city in the most recent reassessment cycle.

Property values did not uniformly rise across Denver in the 2023 reassessment cycle. Some neighborhoods saw steep jumps in assessed values, while others grew more gradually, leaving homeowners in faster-rising areas with larger increases to their DPS tax bill.

Most of DPS’s 52.142 mills derive from state law and voter-approved measures tied to bonds and mill-levy overrides, which comprise a significant portion of the mills.

Denver voters have approved three overrides since 2012, the latest in 2020, a $32 million mill levy to help hire more school nurses and pay for teacher pay raises and hourly workers like bus drivers and custodians.

Current state law caps the amount a district can raise through an operating mill levy override — up to 25% of its total program funding. Revenue from this voter-approved override can support teacher pay and school programs, but it cannot be used for capital construction, which is funded separately through voter-approved bonds.

The 25% cap does not apply to the district’s overall mill levy.

The district can adjust only a small portion of its total tax rate each year. In practice, the changes in a property’s assessed value — not the district’s mill rate — that most often determine whether a homeowner’s bill goes up or down.

Voter-approved bonds and mill levy overrides fund school construction, technology, maintenance and operating costs. Those commitments — some dating back decades — lock in a large share of the district’s tax rate each year.

The district’s over reliance on bond funding comes as the district faces long-term financial pressures. Declining enrollment has left dozens of schools under capacity, while fixed costs continue rising. At the same time, many buildings — some more than a century old — require increasingly more expensive repairs, upgrades and maintenance.

These capital needs have helped drive multiple borrowing measures over the past three decades, culminating in a nearly $1 billion bond that voters approved in 2024. That package will fund major renovations, safety upgrades and deferred maintenance across the district — work DPS has said it cannot support through its regular operating budget.

Even with repeated injections of voter-approved funding, a recent audit found DPS now carries more long-term debt than it holds in assets, an imbalance that reflects decades of borrowing to maintain facilities, while costs outpace revenue growth in an environment of declining enrollment.

These structural pressures shape the district’s tax rate each year.

With most mills locked in by law, debt schedules or prior voter approvals, DPS has limited flexibility to offset rising property values.

State law requires school districts to certify mill levies by mid-December so counties can prepare annual tax bills.

The board unanimously approved the mill levies with minimal discussion Monday. The sole question – about whether lower assessed values would reduce tax bills – drew just a brief confirmation from staff.