Democrats strike deal to temporarily cut property taxes

An eleventh-hour compromise between Gov. Jared Polis and a powerful business organization would extend existing property tax breaks and further trim rates.

• The forthcoming legislation will arrive in the final days of the lawmaking session after months of messy negotiations.

• If successful, it would lead to a truce that keeps referendums off this year's ballot.

Why it matters: Property taxes are a potent political issue this election year as residential and commercial tax bills spike with increases in valuations.

What to know: Under the terms of the deal announced Monday, the residential assessment rate in 2023 would drop to 6.77% from the current temporary rate of 6.95% set in a 2021 law. In 2024, the residential rate would be 6.9%, down from 7.15%.

• In addition, the first $10,000 in taxable value would be exempt.
• The governor said the average property owner would save about $260 a year, the Colorado Sun reports.

What they're saying: The leaders of business-backed Colorado Concern and a conservative organization say if the legislation is approved they will stand down on pursuing their separate ballot initiatives to lower property taxes.

• The commercial assessment rate would fall to 27.9% in 2023, down from the current temporary rate of 29%

Yes, but: The leaders of the state teacher's union and the liberal United for a New Economy — two groups that align with state Democrats — say the governor is taking the wrong approach because the measure would benefit the wealthy property owners more than others.

• They accused Polis of working behind closed doors on "fiscally irresponsible (and) inequitable property tax cuts," noting it would leave less money for education.

Of note: To reduce the $700 million loss of revenue for schools, the legislation will send them roughly $200 million in discretionary dollars. It also diverts $200 million in anticipated refunds under the Taxpayer's Bill of Rights.