A proposal to cap property tax growth has qualified for Colorado’s 2024 ballot.
Initiative 50 would cap property tax revenue increases at 4% per year, though voters could decide via statewide ballot to let the government retain tax revenue beyond that. It is being run as an amendment to the state Constitution, meaning it will need 55% of the vote to pass.
Advance Colorado, the conservative advocacy organization, backed the proposal. Michael Fields, head of the nonprofit’s policy arm, highlighted how quickly they were able to gather the signatures to qualify the measure for the ballot as proof of its popularity. Fields noted the proposal wouldn’t cut property taxes, but it would limit their future growth.
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The proposal comes as Coloradans across the state reel from spiking property valuations and the coinciding growth in taxes owed on their property. In the spring, assessors along the Front Range reported median property value increases between 33% and 47%.
“Growth in government would still be outpacing wage growth, still outpace inflation,” Fields said, citing long-term trends in the metrics. “We thought it was a pretty balanced approach to allow 4%.”
An initial fiscal analysis of the proposal by nonpartisan legislative staff found the initiative would cost local governments about $115 million in 2025. Legislative analysts predict an average statewide property value increase of 4.7% that year. However, the lost revenue to local governments would be worse than that long-term because the cap would have a compounding effect, said Scott Wasserman, head of the liberal Bell Policy Center.
Property taxes are local taxes, and this initiative would effectively give Lamar residents a say in how Littleton residents fund their local services, Wasserman said, picking random municipalities as an example. The proposal “flies in the face” of things like local control and letting local communities set their own priorities, he said. He called it “one of the most ludicrous and impractical proposals I’ve ever seen.”
Statewide growth in property tax revenue has routinely passed the 4% mark, according to the group’s research. But the increases aren’t the same in every county, meaning the proposal could result in a statewide vote every time a local community wanted to keep its total property taxes for local needs.
“If values go up dramatically in Aspen, but stay relatively flat in the Eastern Plains, why should we go to a statewide vote?” Wasserman asked.
While on separate ballots, the initiative shows the ongoing battle being waged over state property taxes following the repeal of the Gallagher Amendment in 2020. Legislators and the governor backed Proposition HH, a ballot question this year that seeks to blunt the sharpest increases in property taxes and potentially save property owners hundreds of dollars in taxes they’d owe without it. Proposition HH would also increase the amount of tax dollars the state can keep by increasing the Taxpayer’s Bill of Rights, or TABOR, limit. Some of that extra money would go to local governments to make up for lost revenue
Fields and Wasserman both likened the proposal to a TABOR cap, but for property taxes, though each had separate opinions on whether that’s good or bad.
While defeating Proposition HH remains the top priority for Advance Colorado this year, Fields argued the two measures would be able to coexist. If it fails, Fields said he wants to pressure state policymakers to find a long-term property tax solution, though, he added, “I’m not holding my breath.”
Wasserman, meanwhile, likened it to a threat over the legislature’s head if it doesn’t come to a long-term solution to rocketing property taxes.
“People are excited to actually do a long-term property tax reform,” Fields said. “We feel good about being able to pass this next year regardless of whether Proposition HH passes.”
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