Colorado voters expected to decide property tax and refund plans

It is expected that two proposals to reduce the soaring tax burden on property will be signed into law. Colorado voters, however, will have the final word when they vote on Proposition HH in November.

Senate Bill 23-303, and House Bill 23,-1311 were introduced in the final days before the end of the legislative session. Jared Polis has a two-pronged approach to reining in assessment rates, which together with increasing property values lead to higher property taxes.

The bills are supported by Democrats who hold a historic majority in both the Colorado House of Representatives and Senate. Republicans, meanwhile, call the bill an affront against Taxpayers' Bill of Rights. Colorado voters approved TABOR in 1992 as a way to limit government spending.

The SB 23-303 allows voters to decide whether they want to lower the Residential Assessment Ratio (RAR) or raise the revenue cap in TABOR, so that the state can pay local governments back the money lost from property tax cuts.

Businesses will benefit from the combination of this proposal and the repeal of the Gallagher Amendment, which reduces assessments on non-residential property by 10% in eight years.

SB 23-303 was initially met with some opposition when critics pointed out that tenants, who are facing serious economic challenges due to rising costs of living, don't get the same benefits as property owners.

Legislators introduced HB 23-1311 late on Saturday in an attempt to close the equity gap created by SB 23-303. The bill aims to give all Colorado taxpayers tax refunds that range from $661 to $1,322 to joint filers, instead of a tiered system where wealthy Coloradans receive a higher return in 2024. This plan depends on the approval of Proposition HH by voters, which is linked to Senate Bill 23 303.

Democrats claim that HB 23-1311 increases TABOR refunds to Coloradans earning less than $100,000 a yearly while lowering their property taxes and protecting funds for vital community services like schools and fire safety.

Republicans say the package will erode TABOR, which they claim is a safety valve that prevents excessive spending by state governments. The Republicans also claim that the legislators committed a mistake by supporting a 2020 ballot initiative to repeal Gallagher Amendment. The state constitution no longer required the ratio of residential to non-residential tax revenue. This repeal may have led to a leveling of commercial property taxes while unintentionally raising residential property taxes.

Ken DeGraaf (R-Colorado Springs) said that the SB 23-303, HB 23-1311, and other bills offered by this legislature are a Faustian deal. You are telling Colorado's citizens that they will face the biggest tax hike in history due to bad policy. If you agree to this deal, you'll get the biggest tax increase in Colorado's history -- less a little -- as long as you sign up for a TABOR program that eliminates refunds in a few years. This seems to be the aim.

Republicans voiced their concerns during the floor debates of the last legislative session about the way the measure was rushed through the Legislature at the end of the session without much notice, for political reasons.

Bob Gardner, R, Colorado Springs, said: "[HB 23-1311] states that it does not matter how much you may have contributed to the excess of the TABOR cap in the state, we will give it back to the citizens on an equally basis." It's a decision that should not be made in 48 hours. This bill is coupled to (SB 23-303) in order for the ballot measure to have a better chance of passing.

The business community has mixed reactions to the package. Colorado Concern is in favor, while groups such as the Denver Metro Chamber of Commerce or the Colorado Competitive Council are still analyzing it. SB 23-303 is said to be a concern for special districts.

In recent years, ballot measures that undermine TABOR have not had much success at the polls. Colorado voters rejected Amendment 66 in 2013, which attempted to raise $950 millions of additional tax revenue for Colorado's public schools by increasing the state income tax rate and modifying TABOR.

Voters rejected Proposition CC in 2019. This would have allowed the state to use excess revenues above the TABOR limits and fund transportation projects, educational services and other public services.

Both bills are expected to be passed on party lines by the Governor's desk as the 2023 legislative sessions officially ends at midnight on May 8.