Colorado property tax relief plan taps into TABOR taxpayer refunds
A coalition of Colorado leaders, steered by Gov. Jared Polis, wants to ask voters to approve a property tax relief package this November — in part by tapping existing taxpayer refunds to cover the cost.
Driving the news: The Democratic governor and lawmakers introduced the much-awaited proposal Monday at the Capitol, flanked by residents concerned about the forthcoming spike in property taxes from new assessments.
- If Proposition HH is approved by voters and fully implemented by local governments it would lower property taxes on a $600,000 home by $632 a year, advocates say.
Details: The ballot measure would also reduce assessment rates and hold them constant for 10 years; cap property tax increases at the rate of inflation; exempt the first $40,000 in a home's value from taxation; and provide a $140,000 tax break for seniors.
- The assessment rate for commercial properties would decrease over 10 years and additional tax breaks are included for renewable energy projects.
By the numbers: For the average homeowner, assessed values increased 33% in Colorado this year, equating to an $834 jump in property taxes. In some places, values jumped as much as 50%. Commercial property increased 20%
Reality check: A reduction in property taxes means less money for local governments, schools and fire districts.
- To soften the blow, the ballot measure would increase the existing state revenue cap in the Taxpayer's Bill of Rights by 1% of the prior year's budget. For 2024, it amounts to $167 million more in state tax collections, which would go to schools and local governments.
Yes, but: Right now, the state is projected to collect more than $2 billion in surplus revenue and TABOR mandates it get refunded to taxpayers in whatever way lawmakers see fit.
- Under the property tax proposal, TABOR refunds would remain but get reduced by $46 per person in 2024.
What they're saying: "I think voters want to see two things: They want to see property tax relief … and at the same time we want to make sure we don't defund our schools," Polis told Axios Denver.
The other side: Michael Fields, president of the conservative Advance Colorado Institute, said the proposal falls short and uses money taxpayers are already owed. "We've got a five-alarm fire in Colorado and our governor showed up with a squirt gun," he said in a statement.
- "The people of Colorado should be skeptical of the governor’s hastily introduced plan with only one week left in the session," House GOP leader Mike Lynch said in a statement.
Of note: The measure would allow local governments to override the inflationary cap in property tax increase any year and does not impose tax limits on school districts, which could reduce the projected savings for homeowners.
- The proposal — which replaces the Gallagher amendment that voters repealed in 2020 — would expire in 10 years.
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