Debate over proposals tackling drug use, treatment illustrates ideological divide in Colorado

Debate over proposals tackling drug use, treatment illustrates ideological divide in Colorado

By Marissa Ventrelli (February 23, 2024)

Colorado lawmakers on Tuesday tackled two proposals that offer convergent — and divergent — approaches to combatting drug abuse during a discussion that starkly illuminated on ideological disagreements at the state Capitol.      

Both bills emerged out of ad hoc panel, which met over the summer as a response to soaring addiction rates nationwide and in Colorado. Colorado ranks in the Top 10 states in the nation for drug use, according to the U.S. Substance Abuse and Mental Health Services Administration.

Advocates and policymakers agree that addressing such a complex issue requires a multifaceted response, but they often clash in their preferred solutions. “Harm reduction” advocates argue that tougher penalties have not solved the country’s drug abuse crisis, while those who argue for a tougher approach say policies should not encourage drug use. 

In 2022, for example, those on the “harm reduction” side argued against making possession of any amount of fentanyl a felony. The other side insisted the state should adopt a zero tolerance policy against fentanyl, arguing a small amount is enough to kill anyone.   

The first bill, House Bill 1037, focuses on several measures, including the distribution of antagonists, such as Narcan, and exempts individuals who receive paraphernalia from a syringe exchange program from being charged with drug possession. The second bill, House Bill 1045, deals with substance treatment. 

Notably, the first section of HB 1037 exempts doctors from being required to report injuries that patients have acquired via the use or possession of drugs.

The bill clarifies that civil and criminal immunity — which already extends to an individual who administers an antagonist to someone who overdoses — also applies to someone who distributes the antagonist. The proposal adds a clause saying the state, in fact, encourages the distribution of expired antagonists.

Another provision exempts users who are using paraphernalia to participate in an exchange program from facing charges.

The bill also specifies that funding allocated by the Department of Public Health and Environment for opioid tests can also be used to purchase other testing equipment, such as fentanyl and xylazine test strips. 

The other sections focus on revising language, substituting all instances of the term “opiate” to “opioid. One of the bill’s supporters explained that the term “opiate” only accounts for natural opioids, such as heroin and morphine, while opioid refers to both natural and synthetic products. 

The bill, which the House Health and Human Services Committee ultimately advanced, is co-sponsored by Rep. Elisabeth Epps, D- Denver, and Sen. Kevin Priola, D- Aurora in the Senate.

Supporters: Incarceration won’t solve crisis

During the hearing, supporters said the current approach to the drug crisis is outdated.

Rep. Chris deGruy Kennedy, D- Lakewood, one of the bill’s sponsors, said users often neglect seeking healthcare for fear of being punished or arrested.

Lisa Raville of the Harm Reduction Action Center echoed that view, arguing that a “harm reduction” approach tends to be a more effective treatment solution than incarceration. 

“People who use drugs and health care providers have a very tumultuous relationship,” she said. “For over 20 years, people have not wanted to access quality health care in the emergency departments because they were being warrant-checked and arrested out of there. That’s not to say that then they’re getting this really great care (upon being arrested). Now, they’re going to jail and getting no health care. People are almost losing limbs out there because they are so afraid to access quality health care.”

“We will never treat or incarcerate our way out of an unregulated drug supply, ever,” Raville added. 

Jason Vitello of the Colorado Criminal Justice Reform Coalition cited a study by the Pew Charitable Trust that claimed incarceration does not reduce drug use.

Vitello claimed that, since the 1970s, the country has spent more than $1 trillion on the “drug war,” and that, despite those dollars, “we are facing down an unprecedented overdose crisis, a highly unpredictable and dangerous street drug supply, and over 500,000 people incarcerated in the US on drug charges.”

“It’s time to reinvest our attention and civic resources from punishment to public welfare,” he said. “The bill diminishes the disconnection, criminalization and isolation experienced by an already marginalized group of individuals and communities, bringing them out of the shadows and into systems of care, because being alive is objectively healthier than being dead.” 

Ellen Velez of the Adams County Health Department, which runs its own syringe exchange program, said the bill would allow for exchange programs to distribute materials other than syringes. She said people who participate in these programs, like Adams County’s, are five times more likely to enter treatment and reduce or stop drug use altogether. 

“Our clients and our community are safer if they’re participating in a program like ours,” she said. “It’s vital that we meet the community where they’re at to provide the support and resources they need to keep them safe and alive.” 

Supporters also cited medical experts, who say expired antagonists do not lose efficacy upon expiration and also have no adverse side effects.

Critics: Colorado should not enable drug use 

While Democrats backed the measures, Republicans regarded the bill’s provisions as enabling drug use. Instead, they argued, the state should prioritize curtailing the flow of illicit drugs into Colorado. 

They also said incarceration plays an important role. 

Rep. Richard Holtorf, R- Akron, said that during his years on the Health and Human Services Committee, he has heard several accounts of former users saying incarceration is what got them clean. 

“I cannot support a bill that doesn’t allow for those people that need perhaps to be incarcerated to stop the drug use to save their lives,” he said. “This gives them a pass and lets people break the law with respect to outdated pharmaceuticals. It also tells doctors not to report health data to the Department of Health openly in this bill, going against every practice in every other part of health care.”

“It is antithetical, it doesn’t make sense to me,” Holtorf said. 

“I did not hear, ‘Let’s stop the drugs coming into our cities and to our state.’ Never heard that — and that is very important,” added Rep. Mary Bradfield, R- Colorado Springs. “How can we get the problem under control if we can’t stop the flow?”

The debate over how to curb drug use has consumed not Colorado and other parts of America, which have been grappling with the opioid epidemic in the last few years.

Nationally, the U.S. drug overdose death toll crossed 100,000 for the first time in 2021. In Denver, alone, 522 people died from drug overdoses last year, the most since tracking began in 1923, according to Denver’s Office of the Medical Examiner.

In Oregon, state lawmakers, facing public pressure amid a surge in overdose deaths, are preparing to vote on re-criminalization. Democrats, who hold the majority in Oregon’s statehouse, are pushing for a bill to make small-scale drug possession a low-level misdemeanor, punishable by up to 30 days in jail, with the opportunity to seek treatment instead of facing charges.

The proposed bill also carries harsher sentences for drug dealers, wider access to medication for opioid addiction, and expanded recovery and housing services along with drug prevention programs. Republican lawmakers, who insist the bill falls short, propose up to a year in jail for drug possession, with the option for treatment and probation in lieu of jail time.  

Back in 2020, Oregon voters approved what’s known as Measure 110, under which the police, instead of arresting drug users, issue them $100 citations, along with a card that lists the number to a hotline for addiction treatment services, which they can call in exchange for help dismissing the citation. Those who simply ignore the citations face no legal ramifications, and state data shows only 4% of people who receive citations call the hotline.

Substance treatment

The House Health and Human Services Committee next heard House Bill 1045, a 49-page measure that deals with substance treatment. Comprised of 27 sections, the omnibus bill, among other things, prohibits insurance carriers from requiring prior authorization for drugs used to treat substance abuse based on dosage amount; allows pharmacists to diagnose and prescribe medication for substance abuse; expands Medicaid coverage to patients in jails who were covered by the medical program prior to being incarcerated; and, establishes a grant program for facilities providing contingency management treatment. 

DeGruy Kennedy, one of the bill’s sponsors, said authorizing pharmacists to prescribe medications, such as buprenorphine and methadone, offers a lot of potential impact, especially in small towns and rural areas, where accessibility to doctors’ offices and hospitals may be limited.

“If we give this authority to pharmacists, we’re gonna be able to get more people started on getting treatment earlier and then get them transitioned to an appropriate level of care,” deGruy Kennedy said. 

Rep. Ryan Armagost, R- Berthoud, focused on the behavioral health diversion program pilot proposed in the bill. Drawing on his personal experience as a law enforcement officer, he said diversion programs are one of the most effective ways of avoiding population overflow in jails and prisons.

“People that are struggling with mental health, people that are struggling with addiction, they do not belong in jail,” Armagost said. “Giving them the chance for treatment to be a functioning member of society again, I think, is something that we need to be able to provide for people to prevent recidivism and to increase public safety and the overall quality of life in Colorado.”

Dr. Rob Valuck of the Colorado Consortium for Prescription Drug Abuse Prevention, said 60% of Coloradans in need of treatment for substance abuse are not receiving it. He said he believes the provision outlined in the bill could help decrease that number. 

Dr. JK Costello, a physician who said he is also in a long-term recovery from drug use, highlighted Colorado’s need for more programs providing contingency management. This type of behavioral therapy involves rewarding or reinforcing positive changes in behavior, such as abstaining from drug use.

Costello said that in 2020, only one such program existed in the state. Now, there are 15 clinics offering contingency management, and the proposed grant could potentially lead to the establishment of even more.

“The contingency management grant program would put Colorado on the forefront of evidence-based treatment, leading to higher rates of abstinence, less incarceration, and lower rates of overdose,” Costello said. 

Joanna Leonard, the director of pharmacy at the Colorado Coalition for the Homeless, said the bill’s removal of prior authorization for specific dosage amounts of medication accommodates for the increased opioid tolerance that she has seen in her patients who use fentanyl.

In 2002, the FDA set a prescribing limit of 24 milligrams per day for buprenorphine, a medication commonly used to treat opioid dependence. Consequently, most insurance companies only cover prescriptions for that dosage. However, Leonard said, due to the rise of more powerful substances, such as fentanyl, some users may require up to 32 milligrams of buprenorphine per day.

At least nine states have eliminated prescribing limits for buprenorphine altogether, and two have increased their limits to 32 milligrams per day. 

Leonard also praised the initiative to eliminate prior authorization requirements for these medications, noting that obtaining such authorizations can often take hours or even days. This extended process poses a significant risk, she said, as it provides more than enough time for people struggling with drug use to change their mind about receiving treatment. 

“When a patient has the motivation to address their substance use disorder and show up at the MAT (medication-assisted treatment) clinic to receive treatment, it is frustrating that they cannot get the actual medication in their hands until an hour or a few days later,” she said. “It may drive them to go back to the street and get fentanyl.”

Several committee members raised questions about the bill’s price tag of $6 million, but the sponsors said the fiscal impact would decrease significantly with the proposed amendments.

In total, sponsors introduced 12 amendments, addressing various aspects of the bill, including language reconfiguration and creating an avenue to pursue federal funding for fetal alcohol spectrum disorder treatment.

Holtorf expressed worries about the length of the bill and its numerous provisions, saying it’s “too big.”  

“In half a decade of being here, I’ve never seen anything like this,” he said. “This is too much. It’s too big and it’s so confusing and fragmented that it’s evidenced just by the number of amendments that you’ve had to present to try to square this thing up and line it up. In my humble opinion, you could have five bills here.”

Rep. Ron Weinberg, R- Loveland, agreed, saying that, while he appreciates the bill’s efforts, he is concerned that the number of amendments means the bill isn’t quite ready to move forward. 

DeGruy Kennedy acknowledged those points.

“Yes, this is a big bill,” he said. “Yes, this bill is trying to do a lot of different things to try to address our gaps in treatment in Colorado. We believe this will meaningfully increase access to treatment for people all across our state for a variety of different kinds of substance use disorders. Yes, it’s expensive, and we’re going to have to sort that out before we go to the appropriations committee, but for the time being, we believe that this policy is going to do a lot to help people in Colorado.”

The committee approved the bill — which was sponsored by Sens. Kyle Mullica, D- Northglenn, and Perry Will, R- New Castle — along partisan lines. Its next stop is the Finance Committee.

Read more at coloradopolitics.com

Why some Colorado lawmakers say funding for K-12 schools is at 1989 levels

Why some Colorado lawmakers say funding for K-12 schools is at 1989 levels

By Jason Gonzales (February 5th, 2024)

Colorado is nearing the end of the Budget Stabilization Factor era.

Since 2009, Colorado lawmakers have channeled over $10 billion from schools to other priorities, a policy called the “BS Factor.” Gov. Jared Polis and lawmakers want to stop diverting money from schools to “fully fund” the state’s obligation in the proposed 2024-25 budget.

But, some Democratic lawmakers argue Colorado won’t be spending at 2024-25 levels. Instead, they point to 1989. And no, not the Taylor Swift album.

“Just because we’ve paid off the budget stabilization factor and we are finally fully funding our schools, we are actually fully funding them at 1989 levels,” said state Sen. Rachel Zenzinger, an Arvada Democrat and vice chair of the powerful Joint Budget Committee, at Chalkbeat’s Legislative Preview event last month. “So we still have some more work to do.”

Here’s why, they say: When you adjust for inflation, Colorado’s spending next year would be about the same as 34 years ago.

In 1989, Colorado spent $4,629 per student. Next year, the state projects to spend $11,319 per student.

Schools need to stretch the money further than in 1989, according to Tracie Rainey, Colorado School Finance Project executive director, a school funding advocate.

Because how much we spend on education doesn’t account for the changes that the nation, the state, and their communities now hold districts accountable for, such as more testing and higher standards, Rainey said.

School funding (Colorado’s version)

For nearly 30 years, Colorado has ranked below most of the country in school funding, Rainey said.

Coloradans have created tax policies that lowered their property tax bills, and decreased what was spent for statewide services — including education, she said.

Voters adopted the Gallagher Amendment in 1982 to reduce housing assessment rates. Then in 1992, voters approved the Taxpayer’s Bill of Rights, otherwise known as TABOR. The constitutional amendment limits government spending and requires voter approval for certain taxes. Any excess dollars collected above the TABOR cap must be returned to taxpayers.

With less money going toward schools, voters in 2000 approved Amendment 23 to return education spending to 1989 levels. The provision required per-student spending to increase by inflation plus 1% each year until 2011. After that, per-student spending would increase each year by at least the rate of inflation.

As Colorado neared its goal, the Great Recession hit. A year later in 2009, Colorado lawmakers began to funnel money away from K-12 education through the Budget Stabilization Factor, known at the time as the “negative factor,” to fund other crucial obligations.

That’s why, with the factor’s end, Colorado is now back to 1989.

It’s almost over now. But what’s next?

Last week, the state received recommendations from a School Finance Task Force on a new formula to fund schools. The formula hasn’t seen a major update since 1994.

The new formula will require the state to spend $474 million more dollars on schools, although the task force recommends phasing in the new formula starting this year. Lawmakers say money will be tight if they want to eliminate the BS Factor and fund other priorities.

The school funding formula answers the question of how to divvy up state dollars. But there’s another question, too: what’s an “adequate” level of funding?

What do schools need to account for the years of shifting expectations, including providing Information Technology services, required testing, student mental health care and an increase in English learning students?

Additionally, teachers statewide have called for salary increases, with the state struggling to keep many educators in the classroom, and districts facing other challenges, like the rising cost of health care and benefits.

Colorado has for years used grant programs to offset some costs for school districts, Rainey said. But there are haves and have nots — many large school districts have grant writers but some small districts have superintendents filling in on bus routes, she said. And, grants also expire.

Now, the state will await two adequacy studies, due by January 2025, that will give lawmakers a better idea of what districts need financially to teach students.

It’s important work, because what’s adequate for a district changes based on the community, Rainey said. For instance, Cherry Creek has high schools with thousands of students, while 100 districts have less than 1,000 total students.

“I would hope that when this analysis is done, lawmakers see what that base level of funding should be so that every student, no matter what district they’re in, has an amount that reflects what they need in order to meet the expectations that the state is holding them to,” Rainey said. “And I think that’s going to be a really important benchmark.”

Even then, Colorado lawmakers could still face funding challenges.

If the adequacy studies say the state must spend a lot more on education, lawmakers would then need to debate how to raise revenue, Rainey said. A referendum sent to voters would be the fastest way to increase state funding, but tax increases are unpopular with voters.

“We would need state level leadership from the governor to legislators on down to support this so voters would say, ‘Yes,’ ” she said.

Read more at Chalkbeat.org

Mental Health Updates

Mental Health Updates

Friends and neighbors, 

The legislative session is in full swing and we are tackling a long list of pressing issues for the people of Colorado. Currently, I am focusing on many projects, one of which includes the legislation that was developed by the Substance Use Disorders interim committee. Our four bills, concerning prevention, harm reduction, treatment, and recovery, will all require considerable work to get across the finish line. But there are many meaningful ideas contained in these four bills that I believe will continue Colorado’s progress and help us finally turn the corner on the overdose crisis.

As I work on these issues, I can’t help but think about the intersection between substance abuse and mental health. We all have friends or family members who have struggled with mental health, and many of us have seen how much it can mean to have access to resources, compassionate communities, and professional help when needed. 

Destigmatizing and expanding access to mental health treatment is more urgent now than ever before. During my time at the legislature, I have been involved in dedicating significant funds, mostly from marijuana tax revenues and federal aid through President Biden’s American Rescue Plan Act, to expand infrastructure to support people in various ways to address mental health and substance use issues. 

We need to do more, and I am committed to working tirelessly to establish a mental health system in Colorado that provides resources to every individual who needs them. 

As this work continues, I wanted to provide an update on several pieces of mental health legislation making their way through the State Capitol.


SB24-001: Continue Youth Mental Health Services Program

This bill makes the I Matter program a permanent program that provides free therapy sessions to youth in response to the ongoing mental health crisis. The I Matter program has already made a positive impact by offering up to six free therapy sessions per year to over 7,900 young people. The bill also adds new procurement and data collection requirements for the Behavioral Health Administration to ensure better oversight.


HB24-1081: Regulate Sale Transfer Sodium Nitrite

This bill regulates the sale of sodium nitrite products, which have been used in some suicide attempts often through so-called “suicide kits” promoted online. These kits with sodium nitrite emerged as an alternative means of attempting suicide after initial recreational use. Regulating access to these kits by requiring verification of commercial need before a sale, clear labeling warning against ingestion, and sales record retention can help address this dangerous method of attempting suicide as part of the broader mental health crisis response.


HB24-1136: Healthier Social Media Use by Youth

Data shows that youth who spend more than 3 hours per day on social media double the risk of experiencing poor mental health outcomes, including anxiety and depression symptoms. This bill creates resources and programs to address the negative mental health impacts of problematic social media use and requires platforms to display warnings about the potential harms of excessive or late-night use.


SB24-007: Behavioral Health First Aid Training Program 

The bill establishes the Behavioral Health First Aid Training Program within the Office of Suicide Prevention in the Colorado Department of Public Health and Environment (CDPHE). The program aims to educate members of the community on how to respond effectively during a mental health or substance use crisis until professional help arrives. Modeled after medical first aid, the program provides valuable skills such as recognizing signs of distress, active listening, offering support, assessing risk, and connecting people to the necessary care. The program uses a train-the-trainer approach to spread mental health skills to schools, non-profits, first responders, and other community members. By increasing mental health first aid capacity, the program aims to encourage early intervention and save lives.


HB24-1015: Workplace Suicide Prevention Education

Suicide has claimed 3,951 lives in Colorado between 2020-2022, demonstrating the need for broader prevention. This bill instructs the Department of Labor and Employment (CDLE) to develop suicide prevention education materials for employers to display that will include information on prevention training programs, information on reducing access to means of self-harm, including firearms, and information on the 988 Suicide and Crisis Lifeline. It also requires the Department of Public Health and Environment (CDPHE) to create a website with additional suicide prevention resources. The workplace can provide one of many points of intervention and having resources visibly posted can promote help-seeking and crisis-response skills among working Coloradans.


SB24-057: Agricultural Workforce & Suicide Prevention

This bill will create a suicide prevention and mental health program tailored specifically to agricultural workers, who have been disproportionately impacted by isolation, economic uncertainty, lack of access to care, and other stressors. It provides customized supports including a crisis hotline, coordinated suicide prevention and crisis management services, and a public awareness campaign to promote suicide prevention. 


SB24-068: Medical Aid-in-Dying

I know this issue is controversial to some, but I’ll tell you why I support this measure. This bill responsibly expands end-of-life options for terminally ill patients who may be experiencing unbearable mental or physical distress related to their illness. By allowing advanced practice registered nurses to evaluate requests and prescribe medication, removing the state residency requirement, reducing the waiting period between requests to 48 hours, and prohibiting insurers from denying coverage, we will increase options for terminally ill adults to end suffering on their own terms while preserving strict eligibility criteria.

That’s all for now and I look forward to sharing more updates with you soon!

Chris

Bill could add primary-care doctors to every health-insurance network

Bill could add primary-care doctors to every health-insurance network

By Ed Sealover (Jan 18, 2024) 

A top Colorado House leader has introduced a bill intended to allow state residents to maintain their primary-care providers even if they switch insurers — a proposal that insurance-industry leaders warn could carry significant costs with it.

House Bill 1005, sponsored by Democratic Reps. Chris deGruy Kennedy of Lakewood and David Ortiz of Centennial, would require all state-regulated health-insurance plans to include primary-care physicians who meet a set of newly created standards. Insurers who can’t agree with qualified providers on contracts would have to reimburse them at a rate determined by the Colorado Division of Insurance, according to the introduced bill.

Speaking Thursday to the Colorado Chamber of Commerce’s Health Care Council, deGruy Kennedy emphasized that he’s open to changes on a variety of aspects to the proposal, including backstop payment rates and the definition of primary-care providers. He said he’s not opposed to most narrow physician networks that insurers create to keep costs down through reimbursement negotiations, but he believes that primary care must be treated differently than specialty care because of its key role in improving public health, he said.

What bothers deGruy Kennedy, who has authored some of the most significant health-care bills of the past six years, is the churn he sees as people change jobs and insurers and then must find new primary-care providers with whom they haven’t built a relationship. Allowing residents to maintain their primary doctors could improve health, avert the more expensive costs of emergency care from conditions that could have been treated earlier and boost the spread of value-based healthcare, he said.

“I do think that there is something lost when you don’t have a longer-term relationship between the patient and the doctor,” deGruy Kennedy said. “If Colorado is a state where we change the way we do primary care, including making investments in primary care, I believe we can have a healthier population and a better health-care system.”

Insurers determine which doctors are in their networks through negotiations with practices that aim to produce a pool of primary-care providers that is big enough to treat customers without delay but that also is small enough where insurers can set limits on reimbursement rates. Requiring that they permit any qualified primary-care physician to be in their network not only takes control of network determination away from insurers who pay for the doctors’ services but gives far greater leverage in contract negotiations to physicians.

Under HB 1005, primary-care doctors would have to be included even in the narrowest networks if they are licensed to practice in Colorado, accredited by a national association of primary-care providers, credentialed to take Medicaid patients and enrolled in a value-based alternative-payment model. DeGruy Kennedy said he’s trying to determine through conversations with insurers how much this would expand typical networks but hasn’t been able to ascertain that yet.

Setting rates for primary-care doctors

The bill would require that the Colorado insurance commissioner contract with an actuary to determine a minimum reimbursement schedule for alternative payment models, and it requires reimbursement at rates that are at least 135% of Medicare payments. DeGruy Kennedy argued the bill must have teeth if insurers can’t agree on payment terms with physicians now outside their networks, though he acknowledged that serves as a stick for insurers even as providers are given more carrots and aren’t required to join networks.

It is that requirement in particular that’s led many health insurers to oppose the bill, arguing that it permits unprecedented government intervention into contract negotiations and destroys the makeup of networks that are a main way that insurers keep down costs. Removing insurers’ control over network makeups and reimbursements in turn could boost insurance-premium costs for Coloradans covered by small-group and individual insurance plans if the bill were to go into effect by 2027 as proposed, several officials said.

Dr. Grace Holub of OB/GYN Affiliates acknowledged that physicians need to be able to spend more time with their patients — a step that, like deGruy Kennedy’s goal of boosting value-based payment models, would improve general health. But Holub, whose practice offers primary-care services to patients who need them, said that as a small employer, she fears the cost impact of a bill that would expand networks so much, leading her to judge that the bill could make healthcare more unaffordable and offset its aims of boosting primary-care services.

“In an ideal world where money is not a factor, it’s great,” Holub said. “But it is going to be very expensive. And as a small business, providing medical coverage to my employees is very important to me.”

Bigger health-care changes

HB 1005 is one of several insurance-mandate bills introduced in the first eight days of the 2024 legislative session, including proposals to require greater fertility coverage, mandate coverage of weight-loss drugs and bar insurers from requiring patients with rare or chronic conditions from having to use only certain pharmacies. Many health-insurance leaders argued, though, that deGruy Kennedy’s effort would have the furthest-reaching effects.

Term-limited after this session, deGruy Kennedy, the House speaker pro tempore, acknowledged HB 1005 is not the request of a particular interest group but is his effort to leave what he believes would be long-lasting improvements on the state’s health system. He continues to negotiate with business groups, patient advocates and others, and he said he doesn’t plan to bring the bill up for a committee hearing before mid-February, so that he has time to consider various concerns and see how he can work them into the bill.

But it’s clear that his biggest obstacle will be convincing insurers, who have been subject to a host of new regulations in recent years, that HB 1005, isn’t just an attack on the networks they have worked to preserve, even as laws have set minimum levels of adequacy for them. And, according to several industry sources, that will be a difficult hurdle to clear.

Read more at TSSColorado.com

State lawmakers seek to limit property tax increases as home values soar.

State lawmakers seek to limit property tax increases as home values soar.

By Kevin Hardy (January 9, 2024)

Soaring home values have increased property taxes for millions of homeowners in recent years, prompting action from state lawmakers to lighten the burden.

“The biggest problem was they just went up so quickly. … I think that’s one of the reasons why it became this rallying cry from the people asking for tax relief,” said Idaho state Rep. Jason Monks, a Republican.

The typical home value in Idaho increased from $275,852 in November 2019 to $434,224 this November — a 57% increase over four years, according to data provided by real estate giant Zillow, which tracks the average of the middle one-third of home values.

Rising home prices typically lead to higher property tax assessments, potentially pushing up tax bills even when tax rates remain steady. Those rates are generally set by local governments, not legislatures. But public pressure has compelled lawmakers in several states, including Idaho, to use surplus state revenues to mitigate property tax hikes.

In Ada County, home to Boise and Idaho’s most populous county, the measure that Monks and his colleagues approved in March delivered nearly $100 million in property tax relief. That amounted to a median cut of more than $500 per home, the Idaho Capital Sun reported.

“I think it was wildly successful,” Monks said. “Really everybody across the state received tax relief, which was the objective of the bill.”

Jared Walczak, vice president of state projects at the Tax Foundation, a pro-business research organization, said he expects many other states — both blue and red — to tackle the issue this year.

“In virtually every state where the legislature meets this year, property tax relief bills will be filed,” Walczak said. “This is a front-of-mind issue for many legislators across the country.”

But property taxes are intrinsically complex.

States can set broad property tax policies — such as tinkering with assessment rates on real estate. But it’s generally local governments, including school districts and municipalities, that set specific tax rates and heavily rely on the revenue for day-to-day operations.

The effort across the country to provide property tax relief has sparked some concern that states could go too far, jeopardizing revenue for school districts and local governments. And some policymakers worry about overly broad relief that could benefit the wealthiest property owners at the expense of those most in need.

In Idaho, legislators had to override a veto from Republican Gov. Brad Little, who was worried about jeopardizing funding for transportation projects and the cutting of a local election date. After the veto override, the governor said he was satisfied with legislative cleanups and overall was supportive of the property tax changes.

The issue is particularly ripe in the Mountain West, where home values skyrocketed after remote work gave Americans more residential freedom. Many well-heeled workers fled the East Coast and California for the mountains, pushing up housing prices.

In December, Montana Republican Gov. Greg Gianforte launched a task force charged with proposing a property tax relief plan for legislators to consider at their next regular session in 2025. Recent legislation authorized up to $675 in property tax rebates for 2023 and 2024, but Gianforte said the state needs“long-term reforms to keep property taxes as low as possible.”

In Wyoming, organizers aim to put a property tax relief measure on the statewide ballot after legislative efforts fizzled. Lawmakers already have introduced several alternative measures ahead of the 2024 session.

And Colorado lawmakers will once again attempt to deliver lasting property tax relief after the failure of a ballot initiative pushed by Democratic Gov. Jared Polis prompted a short-term legislative cut during a special session in November.

Nebraska Republican Gov. Jim Pillen has proposed to reduce local property taxes by increasing the state sales tax rate by 2 cents, from 5.5 cents to 7.5 cents, the Nebraska Examiner reported.

Home values spark urgency

Generally, American home values increase incrementally each year.

The Case-Shiller U.S. National Home Price Index, a benchmark of average single-family home prices, shows a steady increase from the 1980s to the beginning of 2020.

But those values shot up nearly 40% over the past three years — far outpacing inflation rates for food, energy and other consumer purchases.

“So, they [homeowners] could be facing 40% higher property taxes. Even after you account for inflation, this is a very significant increase,” Walczak, of the Tax Foundation, said. “And they recognize they’re not getting 40% more or better government for these additional tax payments. … So there is a public outcry.”

That outcry is especially pronounced among retired and low-income homeowners who often struggle to keep up with rising property taxes.

“I think the main reason people get frustrated with property taxes is that they’re often disconnected from their ability to pay,” said Aidan Davis, the state policy director at the Institute on Taxation and Economic Policy, a research group that supports tax policies to create a “racially and economically equitable tax system.

As with the recent wave of state income tax cuts, it’s unclear whether deep property tax cuts can be sustained over time as state revenues likely begin to decline.

Nearly every state has enacted some form of property tax limit since the 1970s. Some implemented caps on how much valuations of a home can rise each year. Other states have pushed local jurisdictions to restrict rate increases.

But Davis said across-the-board cuts don’t necessarily provide relief to those most in need. Her organization recommends lawmakers consider so-called circuit breakers, which prevent homeowners and renters from being overloaded by property taxes. While programs vary greatly, 29 states and the District of Columbia have enacted circuit breakers that cap property tax bills if they represent too large a share of a homeowner’s income.

Property taxes are generally more regressive than other taxes, Davis said, meaning they take a larger percentage of income from lower-income residents. But circuit breakers can protect people whose home values have surged even if their incomes haven’t.

The role of local governments

Idaho lawmakers last year diverted state surplus revenues to fund property tax relief — sending cash directly to local school systems to make up for lost property taxes.

The legislation also increased the income limit and assessed valuation cap for residents participating in the state’s circuit breaker program, allowing more older, widowed or disabled homeowners to qualify. Homeowners saw an average property tax cut of 18% late last year, according to the governor’s office.

To dissuade local school systems from raising taxes, the legislation cut the most popular of four annual election dates that schools largely had relied on to ask voters to raise revenues.

That was a key reason the law was opposed by the Idaho School Boards Association.

Idaho school systems rely on local levies to fund not only facility costs but also operational expenses such as teacher salaries, athletics and special education, said Quinn Perry, the association’s director of policy and government affairs.

While lawmakers touted the law as a historic state investment in education, Perry noted that the state simply swapped school funding sources. And it’s unclear how sustainable the tax cut will prove over time as pandemic relief dries up and the economy remains uncertain.

In October, Idaho budget officials announced state revenues came in nearly $40 million below projected levels as sales and income taxes were weaker than expected.

“I think there is a good question about sustainability,” Perry said, “because it’s essentially taking a lot of general fund dollars to pay for home relief.”

Texas voters in November overwhelmingly approved a constitutional amendment under which the state will send $7.1 billion to school districts so they can lower property taxes. The amendment, which passed with 80% support, also doubles the homestead exemption and caps property tax increases on certain business properties.

At $18 billion, Texas delivered the nation’s largest-ever property tax cut, said state Sen. Paul Bettencourt, who worked on the plan with fellow Republican Lt. Gov. Dan Patrick.

But he said it also helped those struggling the most: The homestead exemption means homeowners won’t have to pay taxes on the first $100,000 value of their homes, a provision that will mean the most to those at the lower end of the market.

“It’s good tax policy but it’s also good public policy to keep people in their homes,” Bettencourt said. “And quite frankly, I think it’s a moral responsibility. Because with all the pressures in modern society, you want to keep as many families as possible in their own home.”

Finding the right balance

In Colorado, the landscape ranges from rural ranching communities to booming urban and suburban markets.

And property taxes can prove a double-edged sword: a wealthy homeowner or investor could cash in on a home value that has doubled in just a few years’ time. But a cash-strapped or low-income homeowner could be at risk of losing their house over skyrocketing valuations and taxes.

“I’ve been struggling with this,” said Democratic state Rep. Marc Snyder. “It’s really hard to come up with a statewide solution when you have such a variety of situations in Colorado.”

Lawmakers grappled with the issue after the November failure of Proposition HH, which would have reduced property tax rates over 10 years and exempted part of a home’s value for its assessment. In a four-day special session that month, the Democratic-controlled legislature provided about $430 million in property tax relief — but only for 2023.

“It worked for a short-term solution,” said Democratic state Rep. Chris deGruy Kennedy.

Kennedy is a member of a task force that began studying the issue in December. That group also includes representatives of local governments. He says many of those leaders want the state to stay away from the issue of property tax rates.

“The state doesn’t get any property tax revenue so, why should it decide how much money the local governments collect?” he said. “And I think that’s a pretty persuasive argument.”

Kennedy said he wants to ensure that Colorado’s school and fire districts have the revenue sources they need to operate well. But he’s wary of tax relief that is overly broad.

“I want to make sure that whatever we do to provide property tax or rent assistance is done in the most targeted way possible,” he said, “so that we’re actually giving the dollars to the people that need them, rather than doing across-the-board cuts.”

The task force aims to report its recommendations to the legislature in March. That should give lawmakers time to craft legislation before the session ends in May, said Snyder, who is running for a state Senate seat.

“I would not relish the thought of going out and knocking on doors if we haven’t done anything,” he said.

Read more at DailyBreeze.com

My Last Opening Day

My Last Opening Day

Today is opening day for my 8th and final legislative session as a State Representative. 

As I look back on the blur of the last seven years, I can hardly believe how many projects I have been a part of. It’s been the honor of a lifetime And yet there is just an unbelievable amount of work that remains.

This year, many pressing priorities rapidly rise to the top of the list. The high cost of living in Colorado is putting incredible pressure on many families. Gun violence and black market fentanyl are plaguing our neighborhoods. Our air quality, especially in Denver metro, is bad–we are still in severe not-attainment for federal ground-level ozone requirements, and programs on air toxics and environmental justice established by legislation in recent years are just starting to get up and running. And TABOR’s stranglehold on the state budget continues to impair our ability to adequately fund K-12, higher education, behavioral health, and numerous other priorities.

But aren’t we finally paying off the BS factor* for K-12 funding this year, you might ask?

It’s complicated. The short answer is yes, we’re finally digging ourselves out of the K-12 funding hole that started with the Great Recession in 2009.

But that doesn’t mean we’re “fully funding” education, and it’s not because of the state budget–it’s entirely because of increased local property tax revenues, which have also been the subject of many conversations because of the financial pressure they put on low-to-middle income families and small businesses.

Public education advocates, while celebrating the progress, are also quick to point out that paying off the BS factor just gets us back to 1989 funding levels. That’s a pretty far cry from “fully funding.” And it’s not even close to enough to reduce class sizes to maximize the benefit for students or to pay teachers like the professionals they are and give them the means to live in the communities where they teach.

So yes, I’ll join celebrations of finally paying off the BS factor. But I’ll also keep talking about how much more work we have to do.

It’s important to remember that we cannot have our cake and eat it too. It is fiction to believe we can both slash taxes and increase education funding at the same time. The fundament problem is that we must grapple with which taxpayers need tax breaks, and which can afford to pay more of their fair share. 

That is something that is incredibly difficult to do with property tax law, since high property values are not necessarily correlated with high incomes. Continuing my work on property taxes last year, I’m serving this year on a Property Tax Commission that includes four legislators and numerous local government leaders to try to work through this conundrum together. We’re grappling with the balance between the need to fund schools, fire districts, libraries, and child welfare offices with the economic pressures caused by high property taxes and rents, and we’re grappling with questions of state versus local control. I’m hopeful, but it’s a long road ahead.

I’ll also be spending a lot of time this session working on the legislation we built on the Substance Use Disorders interim committee. Our four bills, concerning prevention, harm reduction, treatment, and recovery, will all require considerable work to get across the finish line. But there are many meaningful ideas contained in these four bills that I believe will continue Colorado’s progress and help us finally turn the corner on the overdose crisis.

Last but not least, I’m very excited about a bill that will be introduced today to expand access to high-quality primary care. I have worked on numerous health care reforms during my seven years, and over that time, I’ve increasingly gravitated towards two main themes. First, we need to keep moving away from fee-for-service payment models and toward value-based payment models. I truly believe these kinds of policies are the most transformative things a state can do without the federal government taking action.

Second, we need to invest in building integrated and coordinated care models that begin with a restoration of the role of primary care. It has long been understood that increasing investments in primary and preventive care not only deliver better health outcomes and health equity, but that they also drive down long-term costs by treating conditions early. And yet changes in the market–narrow insurance networks, hospital system consolidation, and others–have moved us in the wrong direction.

My bill will require every Colorado-regulated insurance company to include every primary care provider in every one of their insurance networks, provided that the PCP meets high quality standards and accepts advanced value based payments.

When people changes jobs and insurance plans, they often lose their primary care team, along with a critical doctor-patient relationship that improves health outcomes. Let’s change that.


*The Budget Stabilization Factor is an element of the K-12 school funding formula that accounts for how far short we’re falling of the requirements of Amendment 23, a voter-approved Constitutional amendment from 2000.

During the Great Recession, the 2009 Joint Budget Committee was faced with an impossible collision of two competing Constitutional amendments: the aforementioned Amdt 23, and TABOR. To balance the budget, they were forced to determine which provision to violate. One was slightly less unconstitutional than the other, due to a highly technical interpretation of the law.

The result has been 14 years of failing to meet A23’s K-12 funding targets.

Learn more here.

Dreams of Peace

In 2006, Neil Young released an album called “Living With War.” On the title track, his lyrics include, “I’m living with war in my heart everyday” and “when the night falls, I pray for peace, try to remember peace.”

Those lyrics struck a chord for me. I had not joined protests against the war in Iraq that had started three years earlier. It was too easy to just think of the war as an event that was far away and beyond my ability to influence.

But the idea of “living with war in my heart every day” was a reminder of how easily we all accept this brutal reality. 

I did a little research before Christmas to get a sense of how many ongoing violent conflicts were taking place in our world. The answer was devastating. There are seven conflicts that caused at least 10,000 deaths last year, another 14 that caused between 1,000 and 9,999 deaths, and another 21 that caused 100-999 deaths.

As a State Legislator, I have rarely commented on foreign policy. But the brutal attack by Hamas on the people of Israel on October 7th thrust the issue of war into the forefront. I have received many emails from constituents and have had many conversations with my Jewish and Palestinian colleagues and friends. 

While I can’t pretend to fully understand the dynamics of the conflict in Gaza, I can see quite clearly how much pain and fear are being experienced by our friends and neighbors right now. Antisemitism and Islamophobia are both surging in the US, and there are stories every day about acts of violence being committed against people in our communities. People I know have lost friends and family in Israel and Gaza.

The issue is incredibly fraught. I have been asked to sign onto statements calling for a ceasefire, and I have so far declined to do so because I know these statements have increased fear and pain among my Jewish friends and constituents. And yet my decision not to sign on has caused fear and pain among my Palestinian and Arab friends and constituents. Kyra and I have had many conversations about it, and while she shares my concerns, she also feels so strongly about the horrifying number of Palestinian women and children whose lives have been lost that she opted to sign onto a letter calling for a bilateral ceasefire. 

What Hamas did on October 7th was unconscionable. It was a terrorist act that took the lives of 1200 innocent Israelis and took 250 hostages.

While it is true that the people of Gaza have been suffering for a long time, this is no justification for the taking of innocent lives. Violence only begets more violence, as we have seen in this world time and time again. 

It is understandable to me that Israel feels it must eliminate the threat that Hamas poses to its people. The Israeli people cannot feel safe if Hamas is left to pursue another brutal attack next year.

While I have stopped short of calling for a ceasefire, I can’t help believing there must be a better way for the Netanyahu government to be pursuing this goal. In under three months, over 21,000 Palestinians have been killed, largely due to airstrikes. It is hard to get data about how many of these were civilians versus militants, but the Israeli government released a statistic that suggests that 2/3 of the deaths were civilians. And separate accounts indicate that 8,000 of the deaths were children.

I very much hope that the Israeli government puts an end to these airstrikes and focuses their efforts on more targeted strategies to go after the leadership of Hamas. And I hope to see the Biden Administration and our Congressional Delegation maintain pressure on the Netanyahu government to take this more humane approach.

Not that war can every really be humane. There are not enough tears in all the world for the loss of innocent life in Israel, Gaza, Ukraine, North Africa, Mexico, Ethiopia, Sudan, and so many other places.

There are no easy answers, either. It’s too simple to just call for an end to all war. But if there is to be war, every effort must be taken to preserve every innocent life.

And we must invest so much more in creating conditions for peace across the world. No human being should go without food, water, and shelter. No community should be left exposed to the spread of disease without adequate health care resources. There is more than enough wealth in the world to support these basic dignities. But when it comes to political will, we too often come up short.

Even in our own country, we don’t invest nearly enough in creating conditions for peace. Poverty, homelessness, overdose, gun violence… sometimes it’s too much to bear.

As we enter another new year, may we not let it leave our hearts that we are indeed living with war every day, may we dream of peace, and may we all find ways, whether in our work or in our own daily lives, of creating a better world.

Chris

Economic Security

Economic Security

Friends and neighbors,

When I logged on this morning to start writing this email, I was disturbed to find out I had failed to hit “send” on the previous email I had written on November 12th announcing the special session and the cancellation of the November 18th town hall. So I apologize that this is the first email I’m sending you about the special session that concluded on Monday.

Here’s the short version.

The Governor called us into a special session to do everything we could to put dollars in pockets this coming spring when people would start facing higher property tax bills due to home value growth. We succeeded, passing a very meaningful package of legislation.

Here’s the long version.

In the election that concluded on November 7th, voters soundly rejected Proposition HH which would have cut next year’s property tax increases in half for the average homeowner while ensuring school districts, fire departments, and child welfare offices received “backfill” funding from the state to help make up for their lost property tax revenues. The state would have been able to afford this by changing the way we calculate the annual TABOR cap, allowing the state to retain an additional 1% of tax revenue every year that otherwise would have been refunded to taxpayers.

While I supported HH, I also understand why voters did not. It was incredibly complicated and controversial, pairing multiple ideas that had varying support across the political spectrum. Some voted no because they were worried that property tax reductions would inevitably harm our schools, Some voted no because they didn’t want to see a reduction in future TABOR refunds. Some voted no because local governments were not getting enough backfill funding.

Among the many lessons I learned is this one: keep it simple.

Another is that we need to grapple with the tough question of who needs a property tax cut, and who does not. For my part, I believe there are many in our state who are not struggling to pay their taxes, but I also believe there are many low and middle income Coloradans and small businesses who do need help keeping up with these costs.

Yet another is that it doesn’t make sense for the state to be making these decisions on behalf of the local governments who already have the authority to lower their property taxes, either temporarily or permanently, if their judgment is that they can afford to take in less revenue.

These were the thoughts going through my head when I joined a small group of legislative leaders in meeting with Governor Polis on the morning of November 8th to discuss the possibility of a special session.

As you know, the legislature’s annual regular session runs from January to May. But the Governor also has the authority to call us into a special session to tackle urgent issues that arise from time to time.

The urgent issue this time was that any changes to the income tax system would need to be made by December 1st, and any changes to the property tax system would need to give our county assessors and treasurers enough time to complete their work before sending out property tax bills in early January. 

To hit those targets, the legislature would need to complete its work before Thanksgiving. After discussing the possibility with members of the Democratic caucuses and Republican leaders, we set a start date of November 17th. That gave us all of eight days to get ready. 

The Governor gets to outline the scope of what kind of legislation is be permitted in a special session, and I’m grateful that he gave us broad flexibility to address numerous aspects of economic security from high property taxes to high rents to food insecurity. He also asked us to build a structure for a longer-term conversation about longer-term solutions.

After numerous meetings with local governments, education groups, fiscal policy organizations, and caucus members, as well as attempted negotiations with Republican leadership, we came up with a package of legislation. And it was quite a balancing act.

On the main property tax reduction bill, the Republicans wanted huge cuts to be paid for by cutting into the state’s reserve. Democratic leaders thought that was irresponsible, because it’s taken some time to build up that reserve and we’re going to need it next time there’s a recession. But their biggest request was that we not use any of the TABOR surplus to pay for property tax cuts.

We decided to move to the middle, and agreed to this request. As such, we were left with only $200M with which to backfill revenue losses for our public schools, fire departments, and other local governments. That meant that the property tax cuts had to be smaller than those in Prop HH. 

The good news is that all of our local governments have the ability to pick up where we left off. In some cases, they may keep their mill levies high because they’ve been saving up for a new firetruck or pay raises for their employees. But in other cases, I have heard from many local governments who say they intend to reduce their mill levies, which will deliver additional property tax cuts to both homeowners and businesses.

In order to make sure the state was doing its part, we complemented the property tax reduction legislation with several policies to focus supports on low-to-middle-income Colorado families, including:

  • Doubling the state earned income tax credit (EITC), which targets dollars to working families. The table below shows the federal tax credits, and the state credits will now be 50% of these amounts next year (compared to 25% last year):

.

  • Flattening the distribution of TABOR refunds. Under current law, the highest-income taxpayers would get refunds three times as large as the lowest-income taxpayers. Because of our legislation, everyone gets $800. Simple.
  • Investing $30M in rental assistance programs.
  • Investing $3M of state dollars to draw $3M of federal dollars to pay for summer meals for low-income kids.
  • Funding a new staff member in the Treasurer’s office to process applications for the property tax deferral program. This is a critical backstop that helps those most in need defer a chunk of unpaid property tax bills to become a lien on their property that will be paid off at the time of sale.
  • And for the longer-term, we established a commission with numerous local government voices to meet in January and build toward a consensus for a more sustainable solution.

You may not be able to tell from just reading this outline, but this is a big, huge deal. This means hundreds of dollars (and in many cases, thousands) in the pockets of the folks who are struggling most right now to keep up with the high cost of living.

And I couldn’t be more proud of the work we all did together to make it happen.

There is more work ahead. Local governments need to take the lead on property taxes moving forward, and the state must continue to work on the fairness of our income and sales tax systems. Did you know that, despite the “flat” income tax, lower-income Coloradans pay a higher share of their income in taxes than higher-income Coloradans? That’s not fair, and it contributes to our broken system in which the rich get richer while the poor get poorer, no matter how hard they work. 

And at the very same time, we’re still underfunding our K-12 and higher education systems, our behavioral health system, and many other state services that Colorado families depend on. 

But we’re making progress. While I have less than a year remaining as your State Representative, I intend to spend every minute of it working as hard as I can to make life better for the people of House District 30 and for all of Colorado.

Yours,
Chris deGruy Kennedy

Colorado’s special session on property taxes delivered bigger benefits for low-income families

Colorado’s special session on property taxes delivered bigger benefits for low-income families

By Andrew Kenney (November 20, 2023)

Colorado lawmakers on Monday concluded a special legislative session that was focused on tax relief for homeowners — but when the smoke cleared and the last calculations were completed, it was clear that Democrats’ tax policy reforms had gone far beyond property taxes.

The package of new laws will indeed deliver about $430 million of tax cuts for homeowners across the state. Gov. Jared Polis signed the tax cut and other bills Monday evening.

Among them was an even bigger tax benefits package, totaling nearly $500 million, for lower-income Coloradans. They will get larger TABOR refunds and expanded tax credits for the working poor. Those changes will be paid for, in effect, by the state’s wealthiest residents.

“I’m proud to provide immediate property tax relief for all Coloradans and help those who need it the most,” Polis said in a statement. “Thanks to these actions, more hardworking people can stay in the communities they love or grew up in. I appreciate the legislature’s thoughtful work to save people money and their ability to pass laws during this urgent special session before Thanksgiving to provide property tax relief.”

For most Democrats, it was something to celebrate — a change that would make the state’s tax system more progressive, at least for the next year.

“Our state’s tax code is broken. It’s an upside-down tax code,” said Rep. Javier Mabrey, a Democrat. “This matters. It helps renters. It helps homeowners who are retired.”

Republicans, meanwhile, decried the policy changes as a socialist-style wealth transfer, and they claimed it was counter to the will of voters, who had just rejected Proposition HH, containing some of the same ideas.

“The people who pay little or nothing in taxes get the majority of the benefits and the real taxpayers got little or nothing,” said Sen. Larry Liston, a Republican. (Practically everyone pays taxes in some form, especially sales and other taxes.)

“This is taking money from one person to another, this is legislating money from one person to another,” said Rep. Ken deGraaf, a Republican.

How the money’s flowing

Democrats made three big changes to the tax system for tax year 2023:

  • They granted equal TABOR refunds to all taxpayers next year
  • They expanded the state’s Earned Income Tax Credit
  • They reduced property tax rates 

First, there’s a change to how the state pays TABOR refunds next year. Typically, those refunds are paid out in tiers. The highest-income Coloradans get substantially higher refunds since they generally paid higher tax bills in the first place.

But next year, the state instead will pay “flat” refunds, dividing up TABOR refunds equally among tax filers. 

That’s something that was done once before, in 2022. 

This time, every refund will be worth about $800 — a net gain of more than $200 for those in the lowest income tier, and a loss of $1,000 for those in the highest tier. (You can double those amounts for households with two tax filers.)

The second change is the expansion of the state’s Earned Income Tax Credit, which targets working low-income families. The change will result in $183 million being paid to that group.

Biggest benefits for lower-income households

The changes will have the strongest effects on the two ends of the income scale. 

Looking at the changes to TABOR refunds and tax credits, the majority of the special session’s benefits will go to those households making less than about $51,000. They stand to gain anywhere from a couple hundred to a couple thousand dollars, thanks to the larger TABOR refunds and the earned-income credit. (Much of the variability comes from the earned income credit; its expansion will be worth little to some families, but it could pay more than $1,800 extra to some of the poorest working families if they have several children.)

Altogether, that lowest income tier, which includes more than 1.3 million tax filers, will see roughly $474 million in new tax benefits altogether. About $300 million of that sum will come from their larger TABOR refunds. The rest will come from the expansion of the earned income credit.

Meanwhile, the TABOR changes will have negative impacts on those earning more than $104,000. They could lose out on anywhere from $100 to $2,000 of refunds, depending on their income.

The greatest collective costs will fall on the highest income tier, a group of about 280,000 households that make more than $309,000. Altogether, the TABOR-related changes will cost them nearly $300 million — making up a majority of the cost impact.

“It takes from the rich and gives to the poor.  In the short term, we put a little more money in those lower-income folks’ pockets, but we are not implementing this policy in a vacuum,” said Rep. Gabe Evans, a Republican. He argued that higher taxes on the wealthy would drive them out of the state and lead to an economic collapse that hurts poor people.

Property tax cuts

However, that’s not the end of the math. Some of those wealthier families may still come out neutral or ahead since they also will be getting a property tax discount from the special session.

The legislature ultimately decided to grant every homeowner a $55,000 discount on the assessed value of their homes. They also lowered the statewide assessment rate — which determines how much of the remaining value will be taxed — from 6.765 percent to 6.7 percent.

Those changes apply to the current tax year, for which taxes are paid next year.

Thanks to lower property tax rates, a homeowner with a half-million dollar house might save a couple hundred dollars, while a house worth $5 million might save about $500. However, those savings will only cancel out a portion of next year’s tax bill increases, which are driven by higher property values.

Rep. Emily Sirota, a Democrat, said the package offered benefits for all.

“I think we did something for everyone here and that Coloradans can feel good about,” said Sirota.

The changes to property tax rates will have effects on the budgets of local governments and schools. The state will give about $145 million to schools, bringing them back up to the revenue they would have received under the old property tax rates. And it will also provide about $54 million of “backfill” money to local governments and other local tax districts.

That should be enough to fully replace property tax dollars for areas that have seen their property tax revenue grow slower than 10 percent in the current reassessment cycle — mostly rural areas. It also will fully replace affected funding for all ambulance districts and fire districts, lawmakers said.

Other, faster-growing local governments will get either partial backfill or no backfill. The theory is that big cities like Denver will still come out ahead — even with lower property tax rates, they’ll still see significant gains in revenue due to the growth of the tax base.

Republicans said the property cuts were too small; they had proposed a much larger reduction package, which would have been paid for by spending some of the state’s fiscal reserves.

“Just like we have been doing since the end of the 2023 session, we’ve been here fighting for Coloradans, fighting to ensure that we save you money and that we don’t overburden you with taxes,” said Sen. Barb Kirkmeyer, a Republican.

The final vote on part of the package was briefly delayed after Democratic Rep. Elisabeth Epps of Denver sought to amend one bill to prevent any funds for food benefits being spent on products from occupied Middle East territories including the West Bank, East Jerusalem and the Gaza Strip.

She then moved into the gallery with a group protesting Israel’s bombing campaign against Palestinians and attempted to prevent Republican Rep. Ron Weinberg from defending Israel from the well of the chamber, calling out that he was “out of order” because he was not speaking directly to the contents of the bill. The situation was defused and Epps left the chamber.

Renter relief and grocery help

Democrats also dedicated $30 million to a relief program for renters who are in financial trouble. And, separately, they enrolled the state in a federal program that could offer $35 million to help lower-income families buy groceries next summer— a change that will cost the state about $7 million to administer.

The tax and TABOR changes are only effective for one year. The debate over the state’s long-term approach to taxes is already well underway. 

The special session included the formation of a new panel to draft property tax proposals for next year. Meanwhile, several groups already are proposing their own reforms to the property tax system that could appear on the Nov. 2024 ballot.

Read more at CPR.org

For further reading, check out these pieces at The Colorado Sun, Denver Post, and Colorado Politics.

Property Tax Special Session

Property Tax Special Session

Happy Sunday Morning!

I’m writing with three updates today:

  1. Don’t forget to sign up to testify in support of the state placing an air toxics monitoring station in Lakewood where there have been concerns about unsafe levels of ethylene oxide. More details here.
  2. We are cancelling our Central Jeffco Town Hall meeting on Nov. 18th, because…
  3. Governor Polis is calling the General Assembly into a Special Session starting November 17th.

If you haven’t already read the news, I’ll take a moment to explain what’s going on with the special session.

As you know, the legislature’s annual regular session runs from January to May. But the Governor also has the authority to call us into a special session to tackle urgent issues that arise from time to time.

In this case, it’s all about property taxes.

In the election that concluded last Tuesday, voters soundly rejected Proposition HH which would have cut next year’s property tax increases in half for the average homeowner while ensuring school districts, fire departments, and child welfare offices received “backfill” funding from the state to help make up for their lost property tax revenues. The state would have been able to afford this by changing the way we calculate the annual TABOR cap, allowing the state to retain an additional 1% of tax revenue every year that otherwise would have been refunded to taxpayers.

While I supported HH, I also understand why voters did not. It was incredibly complicated and controversial, pairing multiple ideas that had varying support across the political spectrum. Some voted no because they were worried that property tax reductions would inevitably harm our schools, Some voted no because they didn’t want to see a reduction in future TABOR refunds. Some voted no because local governments were not getting enough backfill funding.

Among the many lessons I learned is this one: keep it simple.

Another is that we need to grapple with the tough question of who needs a property tax cut, and who does not. For my part, I believe there are many in our state who are not struggling to pay their taxes, but I also believe there are many low and middle income Coloradans and small businesses who do need help keeping up with these costs.

But because HH failed, property taxes are set to go up next year. In Jeffco, we’re estimating they’ll go up by an average of 40%. And that’s why Governor Polis is convening a special session. We have just a few weeks before county assessors have to finalize property tax bills for next year. Just because Plan A didn’t work out doesn’t mean that the state doesn’t have a responsibility to tackle this issue while there’s still time.

I am playing a fairly significant role, along with several other legislators, in developing Plan B. I spent much of last week in meetings with local government leaders from our school districts, counties, cities, fire departments, and other special districts to start building toward an alternative.

Without adjusting the TABOR cap (which we can’t do without voter approval), there’s no way the property tax reductions can be as large as they were in HH, or as broadly distributed. So the goal is to target the cuts that we can afford to the taxpayers who need help the most, as well as to utilize other economic security policies like the earned income tax credit, renter assistance programs, and a fairer distribution of TABOR refunds.

What are your priorities for this challenging moment? Reply to this email to let me know. I’ll look forward to reading your thoughts as I continue to engage with stakeholders to develop a responsible solution for the people of Colorado.

Your representative (for just one more year),
Chris deGruy Kennedy