Colorado’s next tax debate is already starting
A new era of taxation has dawned in Colorado, with the formation of a new tax commission because of a new law -- HB23B-1003.
However, this move has received criticism, particularly from Republicans, who see it as a way for Democrats to push for higher taxes and further burden taxpayers.
During the recent special session, which lasted four days, lawmakers passed HB23B-1003, a law aimed at addressing the expected rise in property taxes next year. This rise in taxes has caused concern for homeowners who could see their tax bills increase by 30 percent or more.
Instead of simply addressing the core problem of higher property taxes during the session with good legislation, the Democrat led legislature formed – a commission. According to the new law, the commission will consist of 19 lawmakers and officials from across the state.
Democrats are touting the commission as a solution to the long-term problem of rising property taxes. State Sen. Kyle Mullica, a Democrat, stated, “We obviously need to come up with a long-term solution to this… to bring in these diverse perspectives from throughout the state to really try to solve this problem.”
However, this commission has already drawn criticism for its lack of transparency.
Republicans have accused Democrats of crafting the earlier proposals, including the failed Proposition HH, behind closed doors and introducing them in the final days of the legislative session. Prop. HH, which failed to gain enough support, was an increase in taxes and did not have the backing of a broad coalition of interests.
Moreover, the composition of the commission has also been heavily criticized. While Democrats will have seven members on the commission, Republicans will only have six. Additionally, the commission will also have representatives from interest groups such as teachers' unions, low-income individuals, and senior citizens.
Republican state Sen. Paul Lundeen expressed his skepticism, stating, “The reason I couldn't vote for it was the Democrats put a couple advocacy organizations that do nothing but advocate for more taxes, higher taxes.”
Others also question the need for a representative for renters, who are not directly impacted by property taxes. Lundeen stated that renters have only a “peripheral” connection to the issue and would be better served by focusing on broader improvements to the cost of living.
However, Democratic state Sen. Julie Gonzales argues that the current property tax system affects everyone, and therefore, everyone should have a seat at the table.
Meanwhile, representatives of local taxing districts are hoping that this commission will lead to a more collaborative dialogue with state lawmakers. Ann Terry, executive director of the Special District Association of Colorado, which will also be represented on the commission, stated, “They need to hear from the local governments… and continue a really collaborative dialogue.”
While the commission will not have the power to make changes to the law itself, it can make recommendations to the state legislature.
Some Republicans, however, are still wary of the commission and believe that Democrats will use it as a way to push for higher taxes. State Sen. Chris Hansen, a Democrat, has suggested that the commission should consider allowing for more local and regional flexibility on property taxes.
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Outside groups have also put forward their own proposals, which could potentially change the state's fiscal system. But the question remains, how many of these proposals will ultimately go before voters?
Advance Colorado’s Initiative #50 would create a statewide cap on property taxes. When property tax revenues collectively grow more than 4 percent in a year, state and local governments would have to make changes to cut them back.
Local governments could grant tax refunds, for example, or the legislature could approve discounts in some or all of the state, among other options. The group has already gathered enough signatures to make the ballot next November.
But for now, the new property tax commission will draft a set of recommendations for legislation that could be passed next year, potentially including a ballot measure for Nov. 2024
Only Initiative #50, a proposal aimed at creating a statewide cap on property taxes, having gathered enough signatures to make the ballot so far.