{"id":25880,"date":"2024-08-27T01:07:00","date_gmt":"2024-08-27T01:07:00","guid":{"rendered":"https:\/\/dh.durangoherald.com\/tj\/colorados-special-session-on-property-taxes-may-be-a-bumpy-ride\/"},"modified":"2026-03-31T05:29:30","modified_gmt":"2026-03-31T05:29:30","slug":"colorados-special-session-on-property-taxes-may-be-a-bumpy-ride","status":"publish","type":"post","link":"https:\/\/dh.durangoherald.com\/tj\/colorados-special-session-on-property-taxes-may-be-a-bumpy-ride\/","title":{"rendered":"Colorado\u2019s special session on property taxes may be a bumpy ride"},"content":{"rendered":"\n

\"The
The Colorado Capitol in downtown Denver. (David Zalubowski\/Associated Press file)<\/span>onset<\/span><\/figcaption><\/figure>\n<\/p>

Colorado Gov. Jared Polis said he wanted the special legislative session that begins Monday to bring an end to the state\u2019s property tax wars.<\/p>\n

But first, lawmakers will get their say in the high-stakes fight \u2013 and it\u2019s increasingly uncertain if the deal Polis struck to cut taxes and prevent a pair of November ballot measures from upending the state budget will survive.<\/p>\n

Many Democratic and Republican lawmakers in the House and Senate aren\u2019t happy about being called back to the Capitol to approve a compromise they never agreed to. Some of them plan to introduce bills that could crumble the pact negotiated between Polis, legislative leaders and two conservative political nonprofits who agreed to pull their ballot initiatives if their demands for tax cuts were met.<\/p>\n

The deal was hammered out in private earlier this month among a small group of negotiators that included the governor\u2019s budget director, Mark Ferrandino; state Sen. Chris Hansen, a Denver Democrat; and state Sen. Barbara Kirkmeyer, a Republican from Brighton.<\/p>\n

But Polis\u2019 call for a special session \u2013 just days after the proposal was first presented publicly to the state\u2019s Property Tax Commission \u2013 frustrated some lawmakers who felt they were being asked to rubber stamp a negotiation they were shut out of, without the chance to advocate for their voters\u2019 interests.<\/p>\n

\u201cA deal can only be made when everybody who has to take part in a deal is engaged,\u201d said state Rep. Lorena Garcia, an Adams County Democrat who is pushing to use the special session to make the tax code more progressive.<\/p>\n

\u201cThey want to do a wham-bam-thank-you-ma\u2019am and call it good on something this controversial?\u201d said state Rep. Richard Holtorf, an Akron Republican. Holtorf complained that he hasn\u2019t had enough opportunity to vet the agreement \u2013 a feeling he shares with many Democrats.<\/p>\n

The debate will play out over at least three days \u2013 the minimum time it takes to pass a bill in Colorado\u2019s Legislature. Many of the lawmakers who will be participating thought their time in the General Assembly was done because they leave office at the end of the year, which may further complicate the special session.<\/p>\n

\u201cIt\u2019s a little awkward because I\u2019ve already said goodbye,\u201d said Sen. Rachel Zenzinger, a term-limited Arvada Democrat. \u201cI was already thinking of myself as having moved on. And now I have to get back in the game.\u201d<\/p>\n

Zenzinger said while the special session is inconvenient \u2013 she had already packed her office and has been focusing on her campaign to become a Jefferson County commissioner \u2013 protecting K-12 funding is worth it. Initiatives 50 and 108, the two property tax measures on the November ballot, would jeopardize the state\u2019s new school finance formula.<\/p>\n

\"Gov.
Gov. Jared Polis, alongside Sen. Rachel Zenzinger, signs HB 1164, reducing property tax credits for school districts\u2019 mill levies on June 11, 2021 at the Boettcher Mansion in Denver. (Olivia Sun\/The Colorado Sun)<\/span>cca<\/span><\/figcaption><\/figure>\n<\/p>

Even worse, state budget officials say it could return Colorado to the days of the budget stabilization factor \u2013 the period following the Great Recession in which plummeting property tax rates contributed to a cumulative school funding shortfall of over $10 billion.<\/p>\n

\u201cThe only reason we\u2019re going back to the Capitol is because 50 and 108 are so reckless,\u201d Senate President Steve Fenberg said. The Boulder Democrat, because of term limits, also thought his time in the Legislature had ended in May when the General Assembly\u2019s normal lawmaking stretch ended.<\/p>\n

The deal<\/div>\n

Brought by business alliance Colorado Concern and the political nonprofit Advance Colorado, Initiatives 50 and 108 represent the conservative response to years of rising tax bills and temporary tax cuts that business groups say haven\u2019t gone far enough.<\/p>\n

Initiative 50 asks voters to amend the constitution to enact a 4% statewide cap on annual property tax growth, a limitation that would shrink residential and business property tax bills significantly over time. Historically, property tax revenue has exceeded that mark 45 times in the last 60 years, a Colorado Sun analysis found, as property values rise and population growth and new development add to the tax base.<\/p>\n

Initiative 108 would cut taxes by $2.4 billion by slashing assessment rates for residential and business property, starting in 2025 for taxes owed in 2026. It would also require the state to reimburse local governments for some of the loss \u2013 but competing interpretations of the ballot language offer wildly different estimates of how much.<\/p>\n

The backlash to the ballot measures has been fierce and bipartisan. In recent weeks, political and business groups from across the political spectrum signed on to letters saying they represented a \u201creal and significant threat\u201d to Colorado communities that would deplete public services and cause municipal bond investors to flee Colorado, cutting off a major source of financing for new housing development.<\/p>\n

Supporters have shrugged off those concerns as fearmongering, and blame lawmakers for never delivering the promised replacement for the tax-limiting Gallagher Amendment, which voters repealed in 2020.<\/p>\n

The proposed deal builds off Senate Bill 233, a $1 billion tax cut passed near the end of the 2024 legislative session.<\/p>\n

It would cut property taxes by an additional $255 million starting next tax year, for taxes owed in 2026, with additional assessment rate cuts for residents and some businesses phased in over the following years. Local tax rates vary greatly from one community to the next, but for the typical homeowner, the deal is expected to provide less than $100 in tax savings in the first year of the deal.<\/p>\n

It also would strengthen the measure\u2019s local cap on property taxes, limiting revenue growth to 10.5% over the two-year tax assessment cycle for local governments and special districts, with exceptions for new construction and things like rezonings, which can change how a property is taxed.<\/p>\n

\"Townhomes
Townhomes and single-family residences are seen near the Montaine community on Oct. 17, 2022, in Castle Rock. (Olivia Sun\/The Colorado Sun via Report for America, file)<\/span>cca<\/span><\/figcaption><\/figure>\n<\/p>

School district property tax collections would be limited to 12% growth statewide every two years.<\/p>\n

Top Democrats are also pushing to include some state funding for fire protection districts and other local services that would lose money due to the cuts.<\/p>\n

In exchange for the tax package, the initiatives\u2019 backers said they would be taken off the November ballot ahead of a September deadline. They also agreed not to bring similar measures forward within the next decade \u2013 as long as future lawmakers don\u2019t alter the agreement.<\/p>\n

\u201cI think it\u2019s great that subsequent discussions have led to another bite at the apple that can de-risk the November ballot and provide the long-term stability that homeowners need and that our schools and fire districts need,\u201d Polis told The Colorado Sun in an interview earlier this month.<\/p>\n

But not everyone thinks a special session is the right antidote.<\/p>\n

\u201cI did not believe a special session was necessary,\u201d said House Speaker Julie McCluskie, a Dillon Democrat. \u201cI believed that we could find a path forward to creating a possible compromise framework that could have been considered by the General Assembly in January.\u201d<\/p>\n

And some aren\u2019t so optimistic that the intense atmosphere of a special session is the right one to resolve the property tax debate for the long run. After all, lawmakers have repeatedly failed to put the matter to rest in the last year, with far more time to negotiate.<\/p>\n

First, voters in November 2023 rejected Proposition HH, a complicated ballot measure backed by Polis that would have cut property taxes, while tapping into taxpayer refunds to boost funding to schools and local governments. Later that month, lawmakers reconvened for a special session where they passed another round of temporary tax cuts and created a bipartisan Property Tax Commission tasked with coming up with a long-term solution. But a permanent solution never emerged from the commission, and lawmakers moved forward a plan of their own in the final days of the legislative session.<\/p>\n

Holtorf, who won\u2019t be returning to the Legislature next year after making a failed congressional bid, said it\u2019s too big an issue to be solved quickly and, he said, House Republicans haven\u2019t gotten enough information on the compromise to analyze its efficacy.<\/p>\n

\u201cIf we\u2019re really going to have a special session on property taxes, it\u2019s going to take more than three days,\u201d he said.<\/p>\n

There are signs that the special session may be as complicated as Holtorf believes.<\/p>\n

What\u2019s threatening the deal<\/div>\n

A group of liberal Democrats wants to use the special session to try to make the tax code more progressive.<\/p>\n

State Reps. Steven Woodrow and Javier Mabrey, two Denver Democrats, plan to introduce a bill that would offer a bigger property tax break on people\u2019s primary residence than on their second or third homes.<\/p>\n

The measure would make a $70,000 reduction in taxable value available only to primary residences. That\u2019s irking the short-term rental industry, which includes many homes offered for rent as vacation properties. Airbnb last week was encouraging Coloradans to tell legislators not to make such a change.<\/p>\n

\u201cI know we\u2019re scared,\u201d Woodrow told his House Democratic colleagues Thursday during a virtual caucus meeting. \u201cWe have a gun to our heads. They\u2019re making us the proverbial offer that we can\u2019t refuse. I just want to put on record that that\u2019s a pretty terrible way to legislate.\u201d<\/p>\n

Garcia plans to introduce a bill that would offer more relief to people who own lower-value homes.<\/p>\n

\u201cMost of the bills you\u2019ll see from us are ensuring we are offering targeted relief where it\u2019s most needed,\u201d Garcia said.<\/p>\n

\"Colorado
Colorado Rep. Lorena Garcia speaks before Colorado Gov. Jared Polis signs three bills that enshrine protections for abortion and gender-affirming care procedures and medications during a ceremony with bill sponsors and supporters April 14, 2023, in the State Capitol in Denver. (David Zalubowski\/Associated Press file)<\/span>cca<\/span><\/figcaption><\/figure>\n<\/p>

She brushed off concerns that it may roil any deal made to prevent Initiatives 50 and 108 from being on the ballot.<\/p>\n

\u201cWe still have our jobs to do,\u201d Garcia said, lamenting how only a few lawmakers were involved in negotiating the compromise. If there is any finger-pointing, any deal-breaking, that lies solely with the proponents of 50 and 108. It\u2019s on them.\u201d<\/p>\n

There\u2019s also a push to adopt a resolution that would place a measure on the November ballot asking voters to amend the state constitution to prevent property tax changes from happening anywhere but on the local level. To pass, the resolution would need two-thirds support in each the House and Senate, and then require 55% of voters\u2019 approval to be adopted.<\/p>\n

Republican lawmakers, meanwhile, are planning to introduce property tax measures of their own that would offer more relief.<\/p>\n

One measure, from Republican state Sens. Mark Baisley and Kevin Van Winkle and GOP Rep. Brandi Bradley, would ask voters to amend the state constitution to further limit the growth in property taxes levied by special districts. Another proposal, from state Rep. Ken DeGraaf, a Colorado Springs Republican, would expand the taxable value exemption for seniors, veterans and the surviving spouses of members of the military who die in the line of duty.<\/p>\n

Michael Fields, who leads Advance Colorado, the conservative political nonprofit behind Initiatives 50 and 108, wouldn\u2019t say what bills may cause him to back out of his promise to remove the measures from the ballot.<\/p>\n

\u201cI don\u2019t even know what bills are coming,\u201d he said, \u201cso I\u2019m not going to comment on any of them. We have a deal with the Legislature and I hope that that works out and we are able to pull down our measures.\u201d<\/p>\n

The political \u2013 and literal \u2013 temperature will be hot. There\u2019s not much air conditioning under the gold dome in Denver. Democratic leaders in the House have adjusted the dress code to try to help.<\/p>\n

Instead of coats and ties, representatives will be allowed to dress business casual.<\/p>\n

The Colorado Sun is a reader-supported, nonpartisan news organization dedicated to covering Colorado issues. To learn more, go to coloradosun.com<\/em><\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

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