The Colorado legislature is gaveling in Monday for its second special session in a year aimed specifically at stopping rising property tax bills. And already, lawmakers and special districts are publicly blasting the process.
Supporters of the session hope that a three-day dash will lead to two seismic property tax measures being yanked from November’s ballots and an end to — or at least a reprieve from — the political battles over the policy that have raged since voters axed the Gallagher Amendment in 2020.
Others — including representatives of impacted special districts and several lawmakers in the Democratic majority — expressed skepticism and frustration about another backroom property tax deal they’re now tasked with supporting, involving unelected interests and deeper cuts to local governments and services on top of those already bearing down.
“They are expecting us to be rubber stamps. At least that’s the sense that we’re getting,” Rep. Steven Woodrow, a Denver Democrat, said after a House Democratic caucus meeting last week. “Rather than having been engaged in these discussions, we get brief, doom-and-gloom forecasts from the fiscal folks, followed by presentations on bill terms that are nearly indecipherable” without more extensive background knowledge.
Gov. Jared Polis announced the special session on Aug. 15, calling for lawmakers to pass a “framework” his office had helped negotiate that would further reduce property taxes beyond what the legislature adopted in May. The new deal cuts about $100 from the average property tax bill and puts in a slightly tighter cap on how much property tax revenue can grow compared to the law passed this spring, among other provisions.
Michael Fields, the president of conservative advocacy organization Advance Colorado and backer of the two ballot initiatives, 50 and 108, that would institute steeper tax cuts, has promised to pull his two measures — but only if a new bill adhering to the framework passes.
It’s the second special session seeking to tamp down property taxes after years of temporary measures following the Gallagher repeal in 2020. That amendment set residential and non-residential property tax revenues in a fixed ratio — saving homeowners billions in the decades of its existence but hampering local budgets. Soon after its repeal, home values in Colorado shot up even faster than they had in the prior decade.
Though Colorado homeowners still pay one of the lowest property tax rates in the country, Polis and state lawmakers have been grappling with property tax increases for the past 18 months, after some Front Range communities saw average increases of 33% or more. A long-term fix in the form of Proposition HH was shot down by voters in November, leading to the last special session, during which lawmakers made another short-term change to property tax policy.
Lawmakers expect to grapple with roughly 20 bills during this week’s special session, though several may be quickly dispatched as politically or logistically unpalatable. Polis told The Denver Post last week that he expects some legislation to essentially be conversation-starters that will carry over into next year.
The marquee bill, sponsored by Democratic and Republican leadership in the House, seeks to build off the similarly bipartisan Senate Bill 233 from the last legislative session. That bill cut an estimated $1.3 billion from future property tax collections, while the new proposal will cut another $270 million.
Proponents of initiatives 50 and 108 argue they’re necessary to force the government to act on runaway property taxes due to rising, but usually unrealized, property values. Revenues would still rise, albeit not at levels expected under current conditions and, critics argue, not at rates sustainable for local services.
Legislative leadership and the governor have been explicit that they see the two measures as devastating to local services and the state budget if they pass. Mark Ferrandino, the governor’s budget director, predicted state funding for schools again dipping below constitutionally required limits, “significant cuts” to Medicaid providers and higher education, and losses to local funding for things like transportation if they pass.
But that doesn’t mean everyone affected, including those who agree those measures would be devastating, is going along with the governor’s proposal happily. Indeed, several lawmakers have bristled at the idea that there’s broad agreement at all.
In all, 11 bills set to be considered starting Monday were already publicly available late Friday afternoon. Several come from progressive Democrats seeking to target relief or limit future ballot measures. Others seek to expand or undertake more structural changes.
“We’re already bald. No more haircuts.”
Kristy Olme, a fire chief in Fairplay, remembers feeling like she and other firefighters needed to stand down at the end of the last legislation session, even as their districts faced a $430 million cut over five years as part of that session’s property tax deal.
Olme, president of the Colorado State Fire Chiefs, believed that the spring agreement would avert the deeper cuts of initiatives 50 and 108, and that fire districts would get help down the road. Other lawmakers have likewise said they were under the impression that the deal would stop the ballot initiatives (still other legislators, though, have maintained that they knew there was no such deal finalized with Fields last spring).
Instead, the fire districts are facing a new proposal that would add more than $100 million more to the cuts in Senate Bill 233, Olme said. And worse, the fire chiefs were left out of the talks altogether, even as their firefighters were being thanked for putting their lives on the line to fight the recent spate of wildfires, she said.
“We’re being told it’s just another haircut, just another haircut, and the key word there is ‘another,’ ” Olme said. “We’ve been trying to tell them that we’re already bald. No more haircuts.”
Many fire districts have not seen a true increase in funding since the Great Recession 15 years ago, she said, even as calls for service skyrocketed and fire season has stretched into a year-round concern.
Additional cuts to revenue would mean districts increasingly can’t keep up with costs, she said. Stations would go part-time, or shutter altogether, and districts would struggle with keeping appropriate staffing levels — in effect, increasing the risk to people who are trusted literally to run toward danger.
Ann Terry, CEO of the Special Districts Association, highlighted similar cuts facing other special districts under the new proposal: rural hospital districts hanging by a thread, libraries and recreation districts cutting services for children and seniors, and more. Not every district has seen the increased property values that have enflamed the tax wars, either, she said, but they could still feel the bite of additional cuts.
The funding for the districts is largely set through locally approved mill levies. Future voters can approve future increases, but those can be costly campaigns that take years to gain steam, she said. Meanwhile, local services would be left in the lurch because of state-level decisions.
“The revenue was already approved by our voters for city and county mill levies,” Terry said at a meeting of the property tax commission Friday. “So now those pots are being shrunk by a higher power, and we’re being told to go back and ask again? That just seems like lunacy to me.”
Frustrated legislators
Lawmakers are also trying to find a way to stop future ballot initiatives from driving policy in such an explicit way. How that happens may jeopardize the whole deal to pull initiatives 50 and 108, though.
Rep. Mike Weissman, an Aurora Democrat, and Sen. Chris Hansen, a Denver Democrat, are sponsoring a referred measure that, if passed by voters, would require that future property tax changes be made by local voters, rather than on a statewide basis (as is the case with initiatives 50 and 108). Supporters hoped it would stop future gambits like this one from gaining steam.
But Weissman and Hansen’s proposal has already drawn criticism from Republicans. House Republican Minority Leader Rose Pugliese, who is one of the sponsors of the primary property tax bill, said the legislature’s focus should be on clearing the negotiated framework and ending the special session. More robust conversations, she said, can continue once lawmakers are fully back next year.
She also said Weissman’s planned ballot measure would scuttle the property tax deal.
“Taking that voice or threatening that voice in any way,” Pugliese said, “… is just wrong, fundamentally wrong, and I would never support it.”
On Thursday’s House Democrats call, some lawmakers questioned who had negotiated the deal that they were now being asked to support and vented about having to choose between ballot measures they’ve described as catastrophic and striking deals with groups that they don’t trust.
Lawmakers were frustrated by a sense that their ability to legislate seemed limited, pointing to reporting that Weissman’s bill had already been tagged as a “deal-killer.” Rep. Jennifer Bacon said legislators needed to “put ourselves into a place to remind people whose job it is to make law, which is this branch of government.”
“Who are these stakeholders (involved in negotiations)?” Rep. Emily Sirota, a Denver Democrat, asked. “I felt the answer was not entirely clear, and I guess I would appreciate a little more clarity and transparency because it does feel like some folks are part of a conversation, some folks are not. The way it’s perceived in the press, stating that a majority of us are on board with something is, I think, odd and inaccurate.”
The Democratic majority in the Senate likewise has members raising concerns, but that caucus wasn’t set to meet until later Sunday evening.
House Speaker Julie McCluskie, one of the sponsors of the legislation at the heart of the compromise and a part of the negotiations that created it, said she had sought to avoid a special session. Still, even as many in her caucus chafed at the deal they had been handed and weighed bringing their own bills, she tried to remind them of the stakes.
“I am committed to making sure that we engage with the proponents of 50 and 108 on ideas that come forward on this bill, or other bills that come forward, because I want to see the right policy passed for Colorado, and I think that has to be our objective, too,” she said. “I want to lift up that in the conversations that we’ve had so far — I don’t want anyone to lose sight of … what the concerns are if 50 and 108 pass. I think that has to be something that we are holding as we consider any other alternatives.”
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Originally Published: August 26, 2024 at 6:00 a.m.
