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What is Colorado Proposition HH, and how will it affect you as a homeowner or renter?

The most pressing and high-profile ballot question facing Colorado voters in the Nov. 7 election is how to address the state’s looming, historic property tax increases.

Proposition HH is a complex measure that, if it passes, will have lasting impact for property taxpayers, the state’s tax refunds and local governments. Gov. Jared Polis and his Democratic allies in the legislature are backing HH, which seeks to blunt property tax increases and shore up local governments by increasing the cap imposed on state tax collections by the Taxpayer’s Bill of Rights.

Millions of dollars have been spent campaigning for and against the measure, as supporters argue it’s the best option to solve the property tax problem now — while opponents contend it’s an end-run around TABOR.

RELATED: Colorado voter guide: Stories, explainers and endorsements for the 2023 election

So what is Proposition HH, and how would it affect Coloradans?

What would Prop HH do?

For homeowners, Prop HH seeks to soften the blow of property tax increases by taxing a smaller share of your property’s value than what it’s actually worth. It also would lower the assessment rate that’s used to determine how much you owe in taxes.

The initiative would allow seniors to take the homestead exemption — which cuts their property valuation for tax purposes — with them to new homes.

Under HH, TABOR checks also would be flattened next year. That means all Coloradans, regardless of income, would receive a check or credit for the same amount. As in 2022, this flattening would only be temporary. After next year, refund checks would revert to the previous income-based, tiered system that generally returns more to taxpayers who contributed higher taxes.

RELATED: Proposition HH debate features property taxes, TABOR refunds and dueling predictions of the future

To pay for the property tax relief and other components, Proposition HH would let the state keep more revenue above the normal TABOR cap each year, amounting to an estimated $170 million this fiscal year and growing to as much as $2.2 billion per year in 10 years.

The extra money would be used to offset local governments’ losses in revenue from the reduced property tax increases; to more fully fund education statewide; and to set aside as much as $20 million in rental assistance for those who don’t own their homes.

But the trade-off is that TABOR checks would be smaller for everybody in the future — and potentially eliminated in some years, depending on whether the state hits the higher revenue cap.

I’m a homeowner, what happens to my property taxes?

Property tax bills wouldn’t surge as quickly under Proposition HH as they would under existing law, though they likely still would increase compared to how much you paid this year.

Let’s say you live in a $450,000 home in the Adams County part of Westminster and you make $90,000 a year as a single tax filer. According to the legislature’s nonpartisan calculator, at hhcalc.apps.coleg.gov/calculators, if HH passes, you’d receive $60 more in your TABOR check and save $169 on your property taxes next year compared to what would happen under current law. Your net benefit in 2025 would be slightly better — $235 overall — though your TABOR check would be smaller than without HH.

The math shifts depending on your income level, which changes your TABOR gains or losses; the value of your property; and where you live, based on local mill levies.

A note about the legislature’s calculator: It projects HH’s impact looking forward only two years because TABOR checks depend on recent economic conditions. It may not reflect the full impact of HH, depending on local government action and future economic conditions.

What about renters?

Prop HH most directly affects renters via their TABOR refund checks. If HH passes, then all Coloradans — regardless of income — would receive the same TABOR check next year, estimated to be $898 for single-filers. But that’s a one-year benefit: Unless the legislature extends the change, those checks will revert to their current formula, which sees larger checks go to wealthier Coloradans.

The initiative also unlocks up to $20 million in rental assistance. The aid specifically would be aimed at offsetting cost increases due to overall property tax hikes, said Senate President Steve Fenberg, a Democrat who’s supported the measure.

If HH passes, the rental assistance would require additional rulemaking on how to deploy it.

Here’s an example from the legislature’s nonpartisan calculator: If you’re a renter in Fort Collins who makes $62,000 a year, then you’ll net $60 more next year under Prop HH than you would under current law, thanks to the TABOR tweak. In 2025, though, you’ll receive $42 less than you would without HH. That’s because that tweak — the most concrete benefit for non-homeowners — will vanish without legislative action.

TABOR checks likely would get smaller over the next decade, too.

Supporters of the initiative have argued that renters stand to benefit from Proposition HH beyond their TABOR checks because their landlords won’t have as high of a property tax burden to pass onto tenants by increasing rent. Opponents, though, say property taxes still will increase and may result in cost-shifting to renters, while TABOR checks will decrease in the future due to HH.

What’s up with schools?

The measure would allow the state to keep more TABOR-restricted money each year, in part to devote to education funding. The amount going to schools would increase over the 10-year life of Proposition HH, according to the Blue Book voter’s guide. The increase is expected to be $125 million in the fiscal year that runs from mid-2024 to mid-2025 and north of $2.1 billion by the 2031-2032 fiscal year, according to the Blue Book.

Who’s backing it, and what are they saying?

Proposition HH was crafted by Democratic lawmakers working with the governor’s office. Democratic and progressive groups largely have pushed the initiative, including the Bell Policy Center and the Colorado Fiscal Institute. Education groups have backed it, too.

The major argument for the measure is that it would reduce the size of historic property tax increases while shoring up local governments and helping to fund local schools. Giving everyone an equal TABOR check would help lower- and middle-income earners, too, though that change expires after a year.

What are the opponents’ arguments?

Colorado Republicans have spearheaded the opposition from the get-go, but an array of other groups have come out against it, too. That includes the Colorado Municipal League (representing most of the state’s cities and towns); Colorado Counties Inc. (counties’ advocacy group); and the National Federation of Independent Business (a small business trade organization).

Opponents argue that HH wouldn’t fully insulate homeowners from tax increases and that the measure would lower TABOR checks in the future, while allowing the size of state government to grow.

Denver Post reporter Nick Coltrain contributed to this report.

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