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

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:!-bills-to-save-coloradans-money-on-housing-become-law

Colorado Democrats announce major deal with governor to cut income taxes, redirect TABOR refunds to low-income families

Colorado Democrats announce major deal with governor to cut income taxes, redirect TABOR refunds to low-income families

The income tax rate is expected to drop for 2024 to 4.25% from 4.4%. The state sales tax rate will drop, too.

By Brian Eason and Jesse Paul

Democrats in the Colorado legislature on Tuesday announced a deal with Gov. Jared Polis to make sweeping changes to the state tax code that reduce income taxes and redirect hundreds of millions of dollars of taxpayer refunds to low-income parents and the middle class

The tax package, spread across a handful of different bills in the final days of this year’s lawmaking term, represents an escalation of the legislature’s recent efforts to reimagine the Taxpayer’s Bill of Rights — a darling of the conservative movement — as a vehicle for progressive policy.

Under the TABOR amendment, the government must refund money to taxpayers when revenue rises faster than the combined rate of inflation and population growth. This fiscal year, it’s expected to trigger roughly $2 billion in refunds that would go out in 2025 — but lawmakers have wide discretion in how they distribute the money.

The Democrats’ proposal would create more than $700 million in new tax credits aimed at reducing poverty. One, House Bill 1311, would create a new family affordability tax credit for parents who make up to $85,000. Qualifying families could receive as much as $3,200 in refundable tax credits per child under the bill, which received preliminary approval Tuesday in the House.

The other, House Bill 1134 would expand the earned-income tax credit, another refundable tax break that supplements the federal program of the same name, providing thousands of dollars in assistance, primarily to low-income workers with children. The amounts of both tax credits fall as household income rises.

Taken together, the two measures could cut child poverty by half in Colorado, said Rep. Chris deGruy Kennedy, the No. 3 Democrat in the House, who is sponsoring the family tax credit.

“It’s a trade-off,” deGruy Kennedy told The Colorado Sun in an interview earlier this year. “I’m betting on the idea that an awful lot of Coloradans would say, ‘oh yeah, I’d give up a couple hundred bucks (in TABOR refunds) if that cuts child poverty in half in Colorado.’ ”

In exchange, Kennedy and other sponsors of the tax credits agreed with Polis to cut the state’s income tax rate in years when the surplus exceeds $300 million through a bipartisan bill set to be introduced in the Senate on Tuesday. The governor has said any changes to how TABOR refunds are distributed must be made with an income tax reduction, too. 

Democrats in the legislature have chafed at the demand, calling it inequitable, while Republicans have tried to hold the governor’s feet to the fire to get it done. Higher earners pay more in income taxes, so they receive the most financial benefit from a blanket rate cut.

“This approach will keep more money in people’s pockets in the first place without the government unnecessarily over-collecting and then refunding it,” Shelby Wieman, a spokesperson for Polis told The Sun in a statement. “The governor called for income and sales tax rate cuts during his State of the State address and applauds legislators for their work to drive economic growth and save people money.”

Higher earners pay more in income taxes, so they receive the most financial benefit from a blanket rate cut.

For this tax year, the cut would total roughly $450 million — a 0.15 percentage point reduction on the state’s 4.4% income tax rate. The sales tax rate would also temporarily be reduced.

“Largest income tax cut in Colorado history? I’m all over that,” said Senate Minority Leader Paul Lundeen, a Monument Republican and main sponsor of the forthcoming measure, Senate Bill 228.

Nonetheless, conservatives Tuesday railed against other pieces of the tax deal, calling the dramatic expansion of tax credits an “egregious” attack on TABOR.

“I work. I pay into the system,” said Rep. Brandi Bradley, R-Littleton. “And now I’m going to have to pay for those who don’t.

“Perfect,” she added sarcastically. “That’s a great plan.”

The tax credits deGruy Kennedy said were included in the deal with Polis aren’t the only ones competing for TABOR surplus dollars this legislative session.

Lawmakers are also pushing bills that would create new housing tax credits for renters and seniors. Another measure would benefit certain health care workers amid the state’s nursing shortage. There’s also a plan to allow elderly Coloradans to keep a popular property tax break, the senior homestead exemption, if they move.

If any of those bills pass, it would further reduce the amount left for TABOR refund checks, which are distributed after tax credits and property tax reimbursements are accounted for.

The income tax rate reduction would kick in during years where the TABOR surplus is greater than $300 million. Here’s how it would work:

  • In years where the surplus is between $300 million and $500 million, the rate cut would be 0.04 percentage points
  • In years where the surplus is between $500 million and $600 million, the rate cut would be 0.07 percentage points
  • In years where the surplus is between $600 million and $700 million, the cut would be 0.09 percentage points
  • In years where the surplus is between $700 million and $800 million, the cut would be 0.11 percentage points
  • In years where the surplus is between $800 million and $1 billion, the cut would be 0.12 percentage points
  • In years where the surplus is between $1 billion and $1.5 billion, the cut would be 0.13 percentage points
  • In years where the surplus is greater than $1.5 billion, the cut would be 0.15 percentage points. Additionally, the state’s 2.9% sales tax would be reduced to 2.77%.

If the surplus is greater than $1.5 billion and there’s money leftover after tax cuts, taxpayers would get a flat refund of up to $197.

If the $197 refunds aren’t enough to extinguish the surplus, refunds would be distributed based on how much a taxpayer earns, that would return smaller sums to lower earners and larger sums to higher earners. 

The amounts are all subject to change in the future based on inflation.

Since the surplus this fiscal year, which ends June 30, is expected to be around $2 billion, the 0.15 percentage point income tax rate cut to 4.25% is expected to be triggered for the 2024 tax year for taxes due in 2025, as well as the sales tax rate reduction to 2.77%.

The amount of the additional refunds will depend on what the state’s final revenue picture is when the fiscal year ends July 1. That likely won’t become clear until September, when state budget officials provide updated revenue estimates.


Colorado could use $700 million of TABOR surplus on a new child tax credit

Colorado could use $700 million of TABOR surplus on a new child tax credit

By Andrew Kenney

Starting in spring 2025, Colorado’s lower-income families could receive an average of $2,500 per year under a state-level child tax credit. The proposal, which is moving forward at the statehouse, would pay out an estimated $700 million annually to nearly 300,000 families.

“When we expand and distribute the child tax credit, we will create healthier, happier futures for our kids, and set them on a path towards economic success and economic prosperity,” said Rep. Jenny Willford, a Democratic sponsor of HB24-1311.

The proposal, also known as the Family Affordability Tax Credit, is similar to the federal child tax credit, and it revives a state credit that was previously offered in 2022.

The money would come from Colorado’s budget surpluses, a pool of money that must be refunded to taxpayers. In essence, the $700 million would be redirected away from the tiered TABOR refund checks that are paid to Colorado taxpayers. 

The idea of reducing overall taxpayer refunds to send money to qualifying families has drawn criticism.

“It shows somewhat of a deep contempt for the voters,” said Rep. Bob Marshall, a Democrat. “We’re trying to find a way around  [TABOR requirements] because we don’t like the fact that we have to give $2 billion back to the taxpayers.”

Democratic Rep. Chris deGruy Kennedy, a sponsor, said that tax credits are a legitimate use of TABOR surplus dollars. The state already issues billions of dollars of other credits, each of which lowers the pool of money for general refunds. 

The refundable tax credit — which backers call the Family Affordability Tax Credit — would be larger than many others. Its impact could grow even larger than $700 million, since that estimate is based on an assumption that only three-quarters of eligible households would actually get the credit, at least in the initial years. There is no expiration date on the credit.

“We know that this is an incredibly expensive tax credit … And we know that Colorado is not going to be in a TABOR surplus environment forever,” deGruy Kennedy said. “But while we are, we believe that this is one of the best things we can be doing, to try to help pull kids out of poverty and make a real difference in their lives not just for the short term, but in terms of their brain development and how it impacts their overall life trajectory.”

The change would lift thousands of families above the poverty line, resulting in Colorado having the lowest child poverty rate in the nation, according to the nonprofit Gary Advocacy, which supports the bill.

The credits would be worth the most for the youngest children, paying:

  • Up to $3,200 per child under age 6.
  • Up to $2,400 per child for ages 6 to 16.

The largest credits would be paid to the lowest income groups. Only those households making $15,000 or less as a single filer — or $25,000 as a joint filer — could get the maximum amount. 

Above those thresholds, the credit would be gradually reduced with income. deGruy Kennedy argued that design would avoid creating “benefits cliffs” that discourage families from growing their income.

“There’s no real cliff. It’s just, you taper down until your income exceeds the eligibility threshold,” he said. The credit could potentially be paid in monthly installments.

Because it’s a refundable credit, it could be paid out as cash, even for families that don’t have end-of-year tax obligations.

Sen. Barbara Kirkmeyer, a Republican, said the state shouldn’t be directing so much surplus money to people who may not pay much in income taxes.

“I’m not even sure they’re paying income taxes, and now they’re going to get a tax credit on top of it all,” she said.

The tax credit also faces plenty of competition from other lawmakers’ proposals. Democrats and Republicans alike have proposed dozens of tax breaks this year. All of them are angling for a slice of the state’s budget surplus, but the child tax credit is by far the largest. 

The surplus is a limited supply of money. It’s equal to whatever revenues the state collects beyond the spending limits set by TABOR. And while the surplus has been historically large in recent years, it could quickly shrink to zero in a recession.

deGruy Kennedy and his cosponsors have tried to prepare for that possibility. If the surplus isn’t large enough to fund the full child tax credit, the credit would be downsized for all income tiers. If there’s no surplus, there would be no child credit, ensuring that the new credit doesn’t pull money away from other priorities like schools and prisons in a tough year.

However, that same design also would have effects on TABOR refunds. In years when the surplus is less than $600 million, the child tax credit would take up much of the available money, leaving little or nothing for the general TABOR refund. 

Democrats also have pursued another big change to tax refunds. Because of a law passed last year, TABOR refunds in 2024 will be paid on a “flat” basis, awarding all households about $800 — instead of following the usual system, which awards larger refunds to higher-income households that paid more taxes. But there has not been a similar bill introduced this year for future refunds.

HB24-1311 passed its first important test on Monday, passing the House Finance Committee on a 6-5 vote, with Rep. Marshall joining Republicans in opposition.

The bill still has a long way to go. It heads next to the House Appropriations Committee. If passed by the House, it would also have to get through the Senate. 


Colorado Democrats say property tax relief is coming. There’s no money in the state budget to pay for it.

Colorado Democrats say property tax relief is coming. There’s no money in the state budget to pay for it.

Last year, state lawmakers budgeted $200 million to cover the cost of statewide property cuts. Colorado’s budget proposal for the 2024-25 fiscal year has no such money set aside.

By Brian Eason (April 4th, 2024)

With just a month left in the state’s legislative session, top Colorado lawmakers still haven’t come out with a plan to deliver promised property tax relief — but they insist one is coming.

“This is still a very high priority,” Sen. Chris Hansen, a Denver Democrat who is leading the legislature’s tax discussions, said Tuesday. “I expect to pass a large property tax bill this session.”

There’s just one problem. Unlike this time last year, there’s no money set aside in the budget to pay for it.

That has left lawmakers with limited options — and difficult trade-offs — as they look to overhaul Colorado’s property tax code in the face of public outcry over rising tax bills.

Last year, property values jumped 40% from the previous assessment cycle in 2020, sparking a multimillion dollar ballot fight and a special legislative session. The latter culminated in temporary tax cuts and the creation of a special bipartisan commission to study long-term reforms.

Meanwhile, conservative groups have proposed a number of measures for the ballot that could cut property taxes by billions of dollars over time. If any of them are approved, they would likely force elected officials to cut spending on public services whether they want to or not — adding pressure on lawmakers to come up with a solution of their own.

The commission, chaired by Hansen, released a preliminary report in March that backed a number of ideas to cut taxes and limit the sort of big jumps that occurred in the wake of the pandemic — but it stopped short of specific proposals.

And while Hansen says negotiations are progressing, no clear consensus has emerged on how much tax relief to provide, or what form it should take. And whatever the Democratic majority does remains unlikely to win over many Republicans, who have long sought deeper tax cuts than the political left is willing to entertain.

One area where there is bipartisan agreement: Lawmakers say the state legislature shouldn’t be adjusting property tax rates year after year, when statewide changes can have disparate effects on urban, rural and mountain communities.

“We need to figure a way for the state to get out of (the property tax debate),” House Minority Leader Rose Pugliese, a Colorado Springs Republican, told The Colorado Sun. “I just don’t know if we’re any closer to figuring that out today.”

Here’s some of the key questions to watch:

If the state cuts school taxes, how will it fund K-12?

Last year, state lawmakers set aside $200 million to reimburse school districts and some local government agencies for the revenue they would lose to statewide property cuts.

But Colorado’s $40.6 billion budget proposal for the 2024-25 fiscal year has no such cushion. And as it stands today, the budget relies on property taxes going up, not down.

The across-the-board tax cuts adopted in the November special session are set to expire Dec. 31. Under one estimate, if lawmakers decided to extend the temporary tax cuts another year, they could have to come up with an extra $250 million to keep their promise of fully funding K-12 schools in the next budget.

Lawmakers say they only have two realistic options to come up with that kind of cash if they cut school property taxes again: the State Education Fund and the state’s rainy day fund. But both pose political challenges.

The K-12 education account, which is funded through income taxes, is sitting on a record $1.5 billion balance for now. But revenue projections from the governor’s Office of State Planning and Budgeting show the fund could be depleted to as little as $150 million within the next four years if lawmakers extend the tax cuts.

“It’s not really a great option,” said Rep. Chris deGruy Kennedy, a Lakewood Democrat who serves on the tax commission. He fears dipping into the State Education Fund could imperil the state’s ability to meet its constitutional obligations to fund K-12 in the future. “Frankly, I feel that our paying off of (the school funding shortfall) is pretty tenuous.”

That leaves the state’s reserves, which sit at $2.4 billion, or 15% of general fund spending. But Democrats and their allies outside the Capitol don’t want to touch that money either, fearing it could lead to K-12 or higher education cuts during the next economic downturn.

“The reserve is there for when we hit hard times,” said Scott Wasserman, president of the Bell Policy Center, a liberal think tank that supported Proposition HH, last year’s failed Democratic ballot measure to cut property taxes. “We should not be spending money out of our savings account right now.”

There’s a third option lawmakers are considering — changing state law to separate school tax assessment rates from that of local governments. That could allow lawmakers to provide some tax relief to homeowners and businesses, while sparing schools — and the state budget — from the financial repercussions. It’s just not clear if it’s constitutional.

Whatever the answer, Hansen insists schools will be protected.

“I think you have an ironclad commitment from legislative Democrats that we’re not going to return to the days of the negative factor,” Hansen said, referring to the Great Recession-era budget mechanism that shortchanged K-12. “Whatever we do legislatively, it will not have a negative impact on school funding.”

How will the state distribute TABOR refunds?

The property tax negotiations aren’t happening in a vacuum.

Democratic lawmakers and Gov. Jared Polis also have competing priorities for what to do with Colorado’s revenue surplus under the Taxpayer’s Bill of Rights — an estimated $1.9 billion pot of tax money that the state isn’t allowed to spend on public services.

The TABOR amendment to the state constitution limits state revenue growth to the combined rate of inflation and population growth. Tax collections beyond that limit have to be refunded to taxpayers, but lawmakers have broad discretion on how to do so.

Polis has previously insisted on an across-the-board income tax cut as the starting point for any negotiations involving the TABOR surplus.

Progressive Democrats in the legislature want to redistribute a large chunk of it to low-income families through targeted tax credits for renters, seniors and parents of young children.

Meanwhile, some lawmakers see the TABOR surplus as the best way to cover some of the cost of property tax cuts and provide financial help to fire districts and other local government agencies.

“For us to do any sort of tax relief that goes beyond what’s in the TABOR surplus is cutting K-12, or higher education or Medicaid,” deGruy Kennedy said. “That’s really a nonstarter from my perspective.”

Nonetheless, lawmakers on both sides of the aisle are increasingly skeptical of the state reimbursing local governments for reductions in tax revenue, as some conservative ballot initiatives have proposed.

“While I agree with some of these ballot initiatives in general, I’m incredibly concerned about the backfill piece to local governments,” said Pugliese, the top House Republican. “Potentially, it could take all of our state funding.”

Who should get a tax cut?

During the special session, lawmakers relied on two levers to provide relief:

They reduced the residential assessment rate for the 2023 tax year to 6.7% from 6.765%. And they increased the amount of a home’s value that is exempt from taxation to $55,000 from $15,000. Combined, that represented about an 8% tax cut for a home worth $550,000.

The exemption was designed to provide more assistance to lower-income homeowners rather than wealthier Coloradans. But Hansen said the state wound up cutting property taxes so much on the Eastern Plains that the tax base in some communities would have shrunk without state help.

Meanwhile, in mountain communities and along the Front Range, property values rose so much that many homeowners’ tax bills went up significantly even after the cuts.

This time around, lawmakers say they want to find a way to deliver tax relief to those who actually need it, rather than cutting taxes equally for all homeowners, no matter where they live, how fast their taxes are increasing, or how wealthy they are.

One option endorsed by the tax commission is extending a version of the senior homestead exemption to nonseniors, allowing more homeowners to claim a tax break on their primary residence.

The commission has also proposed an adjustable cap on property tax growth that could give local governments flexibility to override it under certain conditions.

Whatever lawmakers decide, a deal with conservative groups outside the Capitol appears increasingly unlikely. Colorado Concern, a nonprofit alliance of state business leaders, and Advance Colorado, a conservative political nonprofit, have introduced measures that would cut assessed property values back to 2022 levels and limit property tax growth to 4% annually.

DeGruy Kennedy called the ballot measures “fundamentally unserious proposals.”

“I don’t really see a path to meeting them in the middle,” he told The Sun. “What they’re asking is too much, and the math just does not work.”

Michael Fields, the president of Advance Colorado, said he still thinks there’s interest in striking a deal — “I just don’t know if that’s going to be possible.”

“We’ve put out some parameters: There has to be a cut and a cap” on tax growth, Fields said. “It just seems like they haven’t been able to get there yet.”


Colorado senators propose new fee on alcohol producers to fund addiction treatment and recovery programs

Colorado senators propose new fee on alcohol producers to fund addiction treatment and recovery programs

Alcohol trade groups question use of fee, warn of its impacts on industry

By Meg Wingerter (March 13, 2024)

A bill set to be unveiled in the Colorado legislature would levy a new fee on businesses that produce alcoholic beverages, then direct tens of millions of dollars collected each year to addiction treatment and recovery programs.

Sen. Kevin Priola, a Democrat from Henderson, said he plans to introduce legislation Wednesday to create a “state enterprise” that would collect a fee from alcohol producers and wholesalers, with some exceptions for small companies.

The enterprise is expected to generate more than $100 million a year, and would funnel 80% of that money toward alcohol addiction treatment and recovery programs, according to the bill’s sponsors. Funds also would go toward prevention programs, harm reduction, impaired driving enforcement, or services for people born with fetal alcohol spectrum disorders, and to offset the cost of collecting the fee and doling out the grants.

Colorado consistently has one of the highest rates of deaths related to excessive drinking in the country, as The Denver Post illustrated in a four-part series earlier this year that examined alcohol’s impact on public health in the state.

By the most conservative count, which includes only deaths from organ damage by alcohol and complications of withdrawal, drinking killed 1,547 people in Colorado in 2022. That’s more than a 50% increase compared to 2018, and the actual toll may be twice as high, because drinking increases the risk of multiple cancers and heart problems.

About two-thirds of people seeking substance-use disorder treatment in Colorado list alcohol as either their primary problem or one drug among several that they misuse, Priola said.

“Not only is it one of the largest substance-use disorders Coloradans are struggling with, it’s growing,” he said.

The Colorado Brewers Guild said it couldn’t comment on pending legislation, but questioned funding addiction treatment through an alcohol fee, particularly since beer consumption has gradually declined in recent years.

“Hundreds of thousands of Coloradoans responsibly enjoy our craft beer as part of an active and social lifestyle,” the guild said in a statement.

The Distilled Spirits Council of the United States said it estimated that a new fee would reduce sales in Colorado by $220 million and cost 2,600 jobs, without reducing excessive alcohol use. In a statement, the group said it would support efforts to screen patients for alcohol misuse and to refer them to treatment.

“Penalizing responsible alcohol consumers and an already struggling hospitality industry while failing to address the actual problem makes no sense,” the statement said.

While many people do enjoy alcohol without negative effects, it is an addictive product and people who have been drinking excessively can’t always stop, Priola said. The fee would help offset some of the societal costs of unhealthy drinking, he said.

In 2010, the Centers for Disease Control and Prevention estimated that unhealthy alcohol use cost Colorado about $5 billion, mostly due to lost productivity.

“I would argue that this is personal responsibility for the industry,” he said.

State enterprises essentially allow the legislature to avoid the cumbersome process of asking voters for a tax increase as required by the Taxpayer Bill of Rights, within certain bounds. While they can receive some state and local revenue, enterprises act like government-owned businesses, charging fees for a service — though not always one that entities paying the fee can opt out of. For example, a state enterprise collects a fee on Colorado hospitals and uses that money to draw down federal funds for health care.

Usually, an enterprise would have to go on the ballot if it realistically could collect more than $100 million in its first five years, but the bill’s language would exempt the Alcohol Impact Enterprise Fund because it addresses an urgent public health need, said co-sponsor Sen. Chris Hansen, a Denver Democrat.

The model is similar to how the state mitigates the effects of other legal, but potentially addictive, industries, Hansen said.

“This is close to what we do with marijuana. It’s what we do with problem gambling,” he said.

Priola said he and others have been working on the idea for at least three years, but the timing finally seems right with federal COVID-19 relief funds drying up. The enterprise would continue indefinitely, unlike federal funds, and the legislature couldn’t take money from it to balance the general budget in difficult years, he said.

“We’re trying to create a sustainable funding source,” he said.

The bill lays out fees of 16 cents for every gallon of beer or hard cider; 15 cents for every liter of wine; and $1.21 for every liter of spirits. The enterprise’s board could vote to raise the fees every two years, based on the inflation rate, population growth and increases in alcohol consumption.

Assuming that manufacturers and wholesalers pass on the fee entirely, the combined excise taxes and fees on a typical can of beer would rise from about 0.7 cents to about 1.5 cents, Hansen said.

“For consumers, they are likely to not notice this at all,” he said.

Colorado would still be near the middle of the states on alcohol-specific taxes and fees, Priola said. The state currently has some of the lowest excise taxes on alcohol in the country. While higher taxes aren’t a guarantee that people will drink less, drunken driving accidents dropped the last time the federal government raised its taxes.

José Esquibel, a longtime member of the Colorado Substance Abuse Trend and Response Task Force who consulted with the senators, said the model they’re proposing has precedents in how states responded to the opioid crisis of the mid-2000s. Minnesota increased the licensing fees it requires of opioid manufacturers that sell their products in the state, and New York added a per-milligram tax on prescribed opioids.

The proposed increase is small enough that it isn’t likely to drive people to reduce their drinking, but it will give the state more resources to respond, Esquibel said. Coming up with a stable funding source is particularly important for services that health insurance doesn’t cover, like prevention programs and support for people in recovery, he said.

“People may go through a treatment program for a smaller amount of time,” he said. “They’re going to be in recovery for the rest of their lives.”


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.


Bills tackling drug use, treatment debated

Bills tackling drug use, treatment debated

By Marissa Ventrelli, The Denver Gazette
Feb 23, 2024

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

Both bills emerged out of an 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.

Read the full story here.

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.


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.


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.