Coloradans’ property taxes won’t skyrocket now or in the future, thanks to compromise

Coloradans’ property taxes won’t skyrocket now or in the future, thanks to compromise

By THE DENVER POST EDITORIAL BOARD
PUBLISHED: May 9, 2024

The bipartisan deal to extend property tax relief to Colorado homeowners and commercial real estate owners is far superior to any of the highly partisan and heavy-handed ballot measures proposed for this November.

The compromise allows counties and special districts to keep some of the increased tax revenue they will generate thanks to the voter repeal of the Gallagher Amendment four years ago, but it also cuts about $390 million from their 2024 tax collections. School districts will see a $560 million reduction, but will be made mostly whole by state funding from other revenue sources.

Could lawmakers have justified a larger tax cut given the confluence of events that led to 40% increases in property taxes in some jurisdictions? Yes, but compromise is king. Democrats are coming to the table and reducing revenues as governments are hit hard by inflation, rising wages, and construction costs. Republicans are getting behind a more modest cut recognizing the importance of holding our underfunded schools harmless.

The only caveat to our praise is disappointment that after an extensive public process before the 2024 legislative session to solicit ideas for property tax cuts, lawmakers introduced the bill with only three days remaining in the legislative session. This cannot become the norm. Bills are required by law to have a public vetting and while hammering out details behind closed doors may be effective, it is not transparent.

However, at the end of the day, Senate Bill 233 is good public policy.

We appreciate that Sen. Chris Hansen, a Democrat from Denver, and Sen. Barbara Kirkmeyer, a Republican from Weld County, crossed partisan lines to get this bill to Gov. Jared Polis’ desk. Reps. Chris deGruy Kennedy and Lisa Frizell were the House sponsors and both worked on the interim Commission on Property Tax to help develop the intricate tax policy with Hansen before the session even began.

The compromise bill will mean that the owner of an average Denver home, where property taxes are among the lowest in the state, will save about $300 a year compared to their tax bill if no agreement had been made and property taxes reverted to where they were before temporary relief was passed in the 2023 special session.

But the real savings will come in the future, as Senate Bill 233 also caps future increases of property tax revenue to 5.5% per year. School districts and home-rule local governments are excluded from the cap.

Voters can override the cap, although we would urge they exercise caution as property values could increase astronomically if the Federal Reserve lowers interest rates.

Despite Kirkmeyer and Frizell’s support, two conservative groups still plan to bring competing property tax cuts to the ballot this fall. One would lower the state-wide assessment rate by at least $2 billion, and another would put a hard cap on the growth of property tax collections at 4%. Both measures would mean bigger tax cuts for Coloradans, but the cost to counties and school districts would be heavy.

Colorado will be better off under the legislatively developed property tax cuts and cap — rushed as it was this week — than anything we have seen proposed for the ballot box this fall. Colorado has historically kept taxes low and we are glad the General Assembly under Democrat control and Gov. Jared Polis’ leadership have continued the tradition.

Or view the full editorial here.

Read more stories about the property tax deal and other tax policy changes here:

https://www.cohousedems.com/news/signed!-bills-to-save-coloradans-money-on-housing-become-law

https://www.colorado.gov/governor/news/saving-coloradans-money-their-taxes-governor-polis-signs-historic-tax-reform-bills-law

https://www.coloradopolitics.com/housing/property-tax-bill-on-track-to-reach-governors-desk-by-final-day-of-session/article_ddcd79b4-0cdd-11ef-b014-6f06e66acffa.html

https://www.9news.com/article/news/local/local-politics/colorado-property-tax-relief-deal-polis-lawmakers/73-b49635e7-c4f0-4613-a391-3778064ca65e

https://www.cpr.org/2024/05/06/big-business-and-politicians-proposed-bipartisan-property-tax-bill

https://www.axios.com/local/denver/2024/05/06/colorado-lawmakers-deals-avoid-election-ballot-fights

https://www.cpr.org/2024/04/30/why-democrats-are-combining-700-million-child-tax-credit-with-450-million-income-tax-cut

https://www.denver7.com/news/politics/colorado-lawmakers-consider-redirecting-tabor-refunds-to-low-income-families

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