Colorado voters to decide on property taxes, TABOR refund reductions in November

Democratic Colorado Gov. Jared Polis signed a bill into law on Wednesday putting on the ballot a property tax initiative that’s already being challenged in court.

Polis signed Senate Bill 23-303 to give Colorado voters the opportunity to decide on Proposition HH, which asks whether to reduce property taxes and replace the lost revenue with funds from the Taxpayer’s Bill of Rights. He also signed Senate Bill 23-304, which changes property tax valuation practices and requires specific counties to use an alternative protest and appeal procedure.

Last week, Advance Colorado, a conservative advocacy group, filed a lawsuit alleging the title of the ballot item is misleading and its multiple separate subjects violate the Colorado Constitution. Twelve counties have since joined the lawsuit, according to the group.

“This common-sense proposal cuts taxes for property owners, seniors and businesses and ensures the funding for local service providers,” Polis said in a statement announcing the signings. “This money-saving plan builds upon our work to deliver real results for Coloradans by providing over $1 billion in property tax relief over the past two years. I’m looking forward to taking this proposal to Colorado voters in November.”

If Prop HH is approved, it would reduce residential assessment rates from 7.15% to 6.7% in 2023 and 2024 and continue the reduction in the future for primary residences. Second homes and investment properties are not included in the tax reduction proposal.

Prop HH would provide funding for education and “backfill” lost tax revenue to fire districts, water districts, ambulance and hospital districts in areas of the state where property tax revenues aren’t accelerating as rapidly. Property assessments in the Denver metro area have increased 35% to 45%, according to information provided by nine county assessors.

"Coloradans are about to get hit with painful property tax spikes, which is why we're taking action now to meet the moment and provide real relief for Colorado families," Senate President Steve Fenberg, D-Boulder, said in a statement. "This transformative proposal delivers long-term reductions in property tax rates while providing immediate savings on this year’s property taxes, so we can better support our schools and our communities and build a Colorado everyone can afford to love."

A media release from Polis’ office stated the average homeowner would save $1,078 over the next two years and $3,417 over the next five years, if voters approve the measure. Seniors who moved and lost their homestead exemption would be able to claim the benefit, saving an average of $5,700 over the next five years.

The 16-page fiscal note on the bill stated Coloradans could expect approximately a 23% decrease in their TABOR refunds in 2025 if Prop HH is approved. Contingent on Prop HH passing, the General Assembly sent House Bill 23-1311 to Polis to eliminate the current six-tier TABOR refund system and establish a flat refund beginning in the 2023 tax year.

Colorado House Republicans said in a tweet, "By signing SB303, [Gov. Polis] is holding hostage future TABOR refunds w/the promise of slightly lower property taxes."

"[House Republicans] proposed an actual solution this session that would have saved TABOR & kept prop taxes low, but Dems killed it in cmte," the caucus added. "Vote NO on Prop HH."

Advance Colorado President Michael Fields said in a statement that local governments have joined the lawsuit in order to protect the Colorado Constitution.

"This ballot measure clearly has multiple subjects – and the ballot language is misleading and unclear," he said.

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