Democrats Push Half-Baked Property Tax Plan While Ignoring Bipartisan Solutions

As the special session of the Colorado Legislature gears up to address skyrocketing property taxes, Democrats' proposed solution falls far short of addressing the issue at hand.

While Governor Jared Polis has called for bipartisan solutions, Democratic leaders have instead chosen to dismiss Republican efforts and push a half-baked plan that ignores the real concerns of taxpayers.

The proposal, announced by State House and Senate Democratic leaders on Thursday, focuses solely on changes for 2023, offering no long-term tax reforms. This translates to zero real tax relief for Colorado citizens. The plan only increases the value exemption for residential properties by a few thousand dollars and decreases the assessment rate, leaving homeowners to bear the brunt of the burden.

But what about relief for commercial, hotel, lodging, or agricultural properties? Democrats conveniently left these out of their proposal, showing their disregard for all taxpayers and only catering to their own political agenda.

Democratic leaders have sent a clear message to Republicans: their bills won't be taken seriously.

The Democrat’s property tax legislation reduces the valuation for assessment of multi-family residential real property and all other residential real property to 6.7% of the amount equal to the actual value minus the lesser of $50,000 or the amount that causes the valuation to be $1,000. Other provisions of the bill include:

• Maintain the backfill mechanism provided in Senate Bill 22-238 and require the state to reimburse the following local governmental entities for the total amount of property tax revenue lost because of the reductions in valuation established in the bill in the same manner as provided in Senate Bill 22-238, except that:

• fire districts are reimbursed entirely; and

• local governmental entities for which the assessed value of property in the local governmental entity increased by 13.5% or more between the 2022 and 2023 property tax years are not reimbursed at all for additional cuts.

• Require the treasurer to use local entities' mill levy for property tax year beginning Jan. 1, 2022, excluding any mills levied for payment of bonds or other contractual obligations approved by voters, for determining the amount of revenue lost.

• Clarify how local governmental entities are treated if their boundaries are in more than one county for purpose of the backfill.

• Require the state treasurer to reduce backfill as necessary to prevent a local governmental entity from exceeding its constitutional fiscal year spending limit.

• Require the state treasurer to transfer $135 million from the state’s General Fund to the Education Fund to offset school district property tax revenue reductions.

• Delay deadlines as necessary due to the valuation changes for the 2023 property tax year and make conforming amendments related to the valuation changes.

With Democrats holding a majority in both the House and Senate, Republicans have little power to challenge the proposed plan. But some, like House Minority Leader Mike Lynch, have expressed optimism about finding some real reforms for Colorado taxpayers.

“As Republicans, we will not stand for them trying to slide other things in there. Relief for renters and taking your money and then redistributing it to somebody who is having a hard time paying the rent — that’s not part of the Republicans’ agenda. That is a socialist agenda,” said Rep. Lynch. “So we’re going to fight stuff like that really hard. This is about property tax. The way renters get relief is that there’s relief given to the people that own the house in the form of property tax…”

The Republican’s property tax legislation will include one House bill and one Senate bill. The bills are identical except that the House bill reduces both the individual and corporate state income tax rates from 4.4% to 4% for the 2023 income tax year. The bill applies only to the property tax year 2023. Other provisions of the bills include:

• Reduce the actual value for residential property by $80,000, or the amount that reduces the valuation for assessment to $1,000, unless the Senior Homestead Exemption has already been applied.

• Reduce the valuation of assessment for residential real property, including multi-family residential real property, to 6.5% of the property's actual value.

• Reduce the valuation for assessment to 25% of an amount equal to the actual value of the property minus the lesser of $60,000 or the amount that reduces the valuation for assessment to $1,000 for:

• Non-residential property that is classified as lodging property;

• Real and personal property that is classified as agricultural property or renewable energy production property; and

• Non-residential property that is not lodging, agricultural, or renewable energy production property.

• Require the treasurer to use local entities' mill levy for property tax year beginning Jan. 1, 2022, excluding any mills levied for payment of bonds or other contractual obligations approved by voters, to determine the amount of revenue lost.

• Require backfill to local entities at existing Senate Bill 22-238 rates to be paid with the state’s unrestricted General Fund, including reserves.

• Allow the state treasurer to expedite a warrant for lost revenue to county treasurers if a county treasurer completes the reporting requirements regarding property tax revenue lost to local governmental entities on or before Jan. 15, 2024.

• Require a transfer from the state’s General Fund to the state’s Public School Fund for the purpose of offsetting reductions in school district property tax revenue.

• Create the Property Tax Task Force charged with developing a permanent and sustainable tax structure for Colorado.

• Delay deadlines as necessary due to the valuation changes for the 2023 property tax year and make conforming amendments related to the valuation changes.

Senator Barb Kirkmeyer, a leading voice against Proposition HH, has also pointed out a glaring issue with the Democratic plan: She warned that voters may have unknowingly repealed Gallagher Amendment, and now they are facing the consequences.

Other Republican members of the House have also made their stance clear: any compromise outside of clean tax reform for Colorado is unacceptable. Representative Scott Bottoms of Colorado Springs has urged his caucus to stand strong for the people of Colorado and not let the Democrats steal their Taxpayer Bill of Rights (TABOR).

Colorado lawmakers will come together Friday under the golden dome at 9am sharp and attempt to tackle property tax relief for Coloradans – an issue that could have, and should have, been handled during the last regular session.

The only question remaining is are legislators serious or will this only be theater for Colorado voters?