Democrats unveil limited tax-relief plan for special session
Gov. Jared Polis called lawmakers to the Capitol Friday to provide the maximum amount of tax relief possible in a time of "dire need."
Reality check: Don't hold your breath.
What's happening: Democratic legislative leaders will introduce a limited, one-year tax property relief package that aligns with Proposition HH despite voters rejecting the measure in this month's election by a 20 percentage point margin.
- The draft legislation reduces the residential property tax rate from 6.765% to 6.7% and deducts the first $50,000 of a house's value, up from the current $15,000. No tax breaks for commercial properties are included.
- It also increases state spending on rental assistance from the current $30 million to $65 million.
By the numbers: The $200 million initially set aside in Proposition HH will help offset the impacts to school and fire districts, with remaining money going to areas of the state that didn't see a huge jump in property values.
What they're saying: "This is all one big math problem," Senate President Steve Fenberg (D-Boulder) said Thursday in a briefing.
- "This provides relief to those who need it the most, but doing it in a way that protects funding for our schools and communities."
The intrigue: Polis expressed support for tapping surplus money earmarked for TABOR refunds and the state's $2.3 billion in reserves to provide larger tax relief.
- But Democratic leaders rejected the idea of using reserves, calling it "irresponsible."
Of note: Other tax breaks Democrats will advance in the special session include an increase in the earned-income tax credit for low-income residents, as well as legislation to issue flat TABOR refunds to all taxpayers in the spring.
- The change means lower-income taxpayers will receive a larger proportional rebate compared to higher earners, who would receive more under current law.
The other side: Republican lawmakers plan to present their own plan — a much larger break for all residents.
- The legislation would reduce the property tax rate to 6.5% for primary residences and from 27.9% to 25% for commercial properties. In addition, the first $80,000 in value on residences and $60,000 on businesses would get deducted.
- The GOP plan also calls for an income tax cut from the current 4.4% to 4%, which they say will help renters and others that don't own property.
Of note: The plan would tap as much as $300 million in reserves to help local governments, schools and fire districts adapt to the loss in property tax revenue. But it wouldn't cut into TABOR refunds.
- "The Legislature needs to trust and honor the will of the voters and not touch our TABOR refunds," Assistant House Minority Leader Rose Pugliese (R-Colorado Springs) said in a statement, referring to Prop. HH.
More Denver stories
No stories could be found
Get a free daily digest of the most important news in your backyard with Axios Denver.