The Colorado legislature has been meeting this week in a special session on property taxes — for the second time in a year.
Given the twists and turns in the state’s property tax debate, it’s easy to be confused about why lawmakers — who gave final approval to a breakthrough deal Thursday morning — have convened again, starting Monday. Here is a quick look at why they’ve been meeting, what they’re considering and the potential impact as they look to avoid two big measures on the November ballot.
► How we got here: Soaring property values, combined with the 2020 repeal of the Gallagher Amendment — which had stabilized residential property taxes — led to recent steep increases in property tax bills in many parts of Colorado. Lawmakers have been passing temporary relief for years, including during a November special session. They landed on a long-term policy last spring — but it didn’t placate outside conservative and business advocacy groups that are running ballot initiatives in November to force steeper cuts.
Gov. Jared Polis called a second special session this month to head off the measures as part of a deal with their backers, hoping to avert what state officials see as a financial shock for state and local governments if the initiatives pass.
► Ballot measures: Initiative 50 would cap property tax revenue growth and Initiative 108 would reduce assessment rates that determine how much of a property’s value is taxed. Estimates are that Initiative 108 would cut statewide property tax collections by more than $2 billion a year, with the state needing to either compensate local governments or let them deal with the lost revenue.
► Compromise bill: The ballot measures’ sponsors have agreed to pull them if lawmakers approve the new House Bill 1001. It would cut assessment rates more modestly for both commercial and residential properties, reducing statewide collections by about $254 million. That’s on top of $1.3 billion in cuts passed by lawmakers in the spring. (Update: The Senate took its final vote on HB-1001 Thursday, sending it to Polis for his signature.)
► Homeowner impact: How the scenarios compare is complicated. But under the law passed in the spring, the average savings for the owner of a typical $700,000 home was expected to be roughly $400, depending on local mill levies. The estimated additional savings from the special session bill are less than $100 for most homeowners, with varying projections putting the average in the $60-80 range.
If the ballot measures were to pass, Initiative 108 would have the most direct impact. Initially, it actually would increase taxes because the spring tax relief law would be invalidated. But in the 2025 tax year, 108 would reduce taxes by $539 for the average homeowner compared to current law, according to an analysis by the Colorado Fiscal Institute, a progressive think tank.
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Originally Published: August 29, 2024 at 6:00 a.m.
