Democratic lawmakers who hammered out and passed by overwhelmingly bipartisan margins compromise property tax bills this past legislative session are feeling dismayed and betrayed by conservative groups that got their way in negotiations but are forging ahead anyway with a pair of draconian tax-cut ballot questions Dems say would devastate the Colorado economy.
Initiative 50, which, if passed, would hard cap property tax increases at 4% and allow property owners to retain additional taxes, would be a constitutional amendment and has already qualified for the November ballot. Initiative 108, which further slashes property tax rates, still needs more signatures by a July deadline, but Colorado continues to have, since 2021, has the third lowest effective property tax rate in the nation at .49%, according to conservative analysts.
SB24-233 appeared to have buy-in from the two groups backing Initiatives 108 and 50 — Colorado Concern and Advance Colorado — but then they reportedly reneged and divisively decided to go ahead with the initiatives anyway, despite what Senate Republicans touted as a bill “reducing Colorado property taxes by $1.3 billion without raiding TABOR or crippling the state budget.” Now SB24-233 won’t go into effect if voters pass either 50 or 108.
“Initiative 108’s going be devastating — let’s just be clear about that — as would Initiative 50,” said state Sen. Chris Hansen, D-Denver, prime sponsor with Sen. Barb Kirkmeyer, R-Brighton, of the main piece of property tax relief legislation SB24-233. “[The initiatives] would result in about a $3.1 billion set of cuts to the state government overnight. So that essentially wipes out higher-ed funding, puts us at about a billion-dollar negative factor immediately, wipes out HUTF [Highway User Trust Fund] funding for localities, and forces huge cuts on provider rates, which means our rural hospitals would be decimated.
“[Initiatives 108 and 50] would decimate healthcare, decimate pre-K, decimate K-12 [education], and probably lead to the closure of state universities. It’s very likely that they would either close or be reduced to the bare minimum because we’d have to take more than a billion dollars out of higher ed,” Hansen added. “The special districts are going to get wiped out too. Ambulance districts, fire districts, water districts, sewer districts; these are all totally dependent on property taxes. And so, if you cut them by 15 or 20% in an environment where inflation has been running at a high clip, it’s a double cut. Their costs are going up as their revenue is falling significantly. That means no fire protection. That means sewers are going to break down.”
Asked if he felt a deal was firmly in place for the initiatives to be pulled if SB24-233 passed, Hansen said, “Certainly. We were trying to create a sustainable way to cut property taxes instead of leading to massive cuts. And we were asked [by the two conservative groups] to meet certain targets, and we did. And to have those groups basically say, ‘Oh, no, that’s not going cut it for us, we’re still going to go to the ballot, is pretty disappointing. The far right didn’t abide by the deal. So we got 33 [of 35 total] votes in the Senate and 58 [of 65 total] votes in the House. This was a true bipartisan deal. But [Advance Colorado’s] Michael Fields and his crowd are much further right, apparently, and refused to abide by the terms of the deal.”
Fields fired back in an email Monday night:
“That’s not true at all. There was never a deal,” Fields wrote. “Their bill increases taxes on homeowners instead of lowering them. And the claims about our measures are also wrong. Our measures allow for a 4% increase in revenue each year (8% every assessment cycle). When revenue increases every year, there are no ‘funding cuts.’ We are calling our measures ‘The Citizens’ Tax Cut’ — and we are looking forward to debating these lawmakers about why Colorado families deserve real property tax relief.”
Asked about a May 19 Colorado Politics story claiming an all-out legislative assault on TABOR [Taxpayer Bills of Rights] refunds this past session, Hansen pointed to the heavy sourcing in the article of the conservative Common Sense Institute (CSI).
“[Phil Anschutz] also funds CSI, so they just print whatever the rightwing think tank puts out. It’s not journalism,” Hansen said of the billionaire owner of Colorado Politics and the Colorado Springs and Denver Gazette newspapers. According to some Republicans, Anschutz also funds the dark-money group Advance Colorado.
“And don’t forget, the people who will be funding these campaigns [for Initiatives 108 and 50], their kids don’t go to public school, in case you wondered,” Hansen added.
State Rep. Mary Young, D-Greeley, a longtime school psychologist in districts north and east of Greeley, was the prime House sponsor of SB24-111, which Hansen sponsored in the Senate. Like SB24-233, it was meant to provide property tax relief for seniors as home values have skyrocketed across Colorado in recent years.
Young explained SB24-111 allows more people over the age of 65 to qualify for property tax breaks if they’re downsizing or moving into a smaller home to be near family. A previous bill created a senior homestead exemption for people over 65 who had been in their homes 10 or more years. But that tax exemption wasn’t portable.
Young’s bill creates something called a Senior Primary Residential Real Property exemption for people who were previously eligible for the homestead exemption but lost it by selling a previous property.
“They can re-qualify again because they sold the previous property that they qualified under, and now they can access this new exemption, which obviously people at this age increasingly can be on fixed incomes, which gives them financial stability,” Young said. “This bill is paid for in the same way as the senior homestead exemption is, with TABOR refunds. And then if there’s not a TABOR refund available, it goes to the general fund.”
Young said that besides allowing people to age in place in a smaller home or more senior-friendly one-story home after selling a larger, longtime property where they raised a family, the bill will have a ripple effect of creating more housing for young families.
“Really one of the other big issues is creating more affordable housing and having more on the market for people who are looking for homes to be able to access that too,” Young said. “It’s also for people outside the demographic because it frees up some housing for people who are looking for a home, while seniors are often living in a home that they had three or four children in. It was a large home, and they really don’t want or need that size home anymore.”
Asked about the bipartisan nature of the compromise property tax bills and the likely devastating impact the two ballot questions would have, particularly on education, Young said, “That’s my perspective, too. And obviously an extremely negative impact on fire districts and other special districts. So hopefully people will understand that impact and not support those ballot measures.”
And Hansen added there is no Plan B or emergency scenario that can be implemented if 108 and 50 pass.
“Legally, there is no glass to break. I think we would essentially have to institute immediate cuts to all areas of state government,” Hansen said. “There is no other source [of funding]. That would have to go back to the voters if we wanted to raise income tax or something [because of TABOR]. There is no alternative but massive cuts.”
