May 13, 2024 - Politics

Property tax relief battle in Colorado moves to the ballot

Illustration of a pen filling in a ballot checkbox in the shape of a house.

Illustration: Allie Carl/Axios

The ink is barely dry on the much-hyped Democratic property tax relief package, but a campaign is underway to discredit the legislation and push forward with competing ballot measures.

Why it matters: The opposition undercuts claims from Gov. Jared Polis and Democratic leaders that the legislation is a grand compromise and sets up another high-stakes ballot fight that could upend the state's $41 billion budget.

Context: The debate dates to the 2020 repeal of the Gallagher Amendment. which capped residential property taxes but forced higher rates on businesses.

  • The replacement didn't come until the 2022 election with Proposition HH, but voters rejected the measure, leaving lawmakers scrambling to find a solution to rising taxes as property values soared.

State of play: The bipartisan bill approved in the final hours of the legislative session last week prevents property taxes from rising as much as anticipated through temporary reductions in the assessment rates and taxable value on homes.

  • The effective tax rate would decrease to 6.44% on a $700,000 home, down from the current rate of 7.15%, according to an analysis from the Bell Policy Center, which helped craft the legislation.
  • Democrats argue it's a property tax cut from levels prior to the temporary reductions currently in place.

Yes, but: Property taxes still will increase because of rising values, the conservative-minded Common Sense Institute argues in its analysis, meaning the legislation offers no property tax relief in 2024 or 2025.

  • It also correctly notes that the 5.5% cap on local property tax increases is riddled with caveats that don't apply to Denver and other home-rule cities, nor school districts, which are a significant part of property taxes.

The other side: Two ballot questions β€” Initiatives 50 and 108 β€” that are poised for the November election would provide an alternative by imposing caps on property taxes and requiring the state to fill gaps.

  • Democrats have suggested they would gut the budget and create a "constitutional crisis."

The intrigue: The legislation β€” crafted with the help of the Colorado Chamber of Commerce β€” was intended to negate the ballot measures, but the advocates behind it, including the influential business organization Colorado Concern, still plan to move forward with them.

  • In an opinion piece published Friday in the Denver Post, the legislation took another bullet from Thornton Mayor Jan Kulmann and Tim Foster, the former Colorado House GOP leader.
  • They called the legislation a "ploy" that is "equal parts disappointing and disingenuous." They voiced support for the two ballot measures, instead.

The bottom line: The dispute about whether the legislation provides enough relief, as well as the prospect of far-reaching ballot measures, quashes a Democratic victory lap on property taxes and keeps long-sought relief an open-ended question.

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