Colorado lawmakers approve new property tax credits to end ballot measures

The Colorado Legislature passed modest property tax cuts on Thursday, concluding a four-day special session and ending — for now — the political fighting that has dominated the Capitol and threatened to spill over to the ballot box.

If all goes according to plan, the deal will calm the state’s years-long firestorm over property tax policy. The turbulence included the repeal of a decades-old constitutional amendment that regulated tax rates, the economic rollercoaster following the COVID pandemic and skyrocketing home prices in metro Denver and much of the state.

“Essentially, the concerns of Colorado residents have been addressed: long-term relief, a reasonable cap (on tax growth), and more than 4,000 entities funded by property taxes, including every school district, (will) have the stability they need about plan and budget,” Gov. Jared Polis told JS in an interview Thursday. “… With all the chaos over the last few years, it has been very hard on our fire districts, schools and library districts.”

House Bill 1001which received final Senate approval shortly before he spoke, builds on a tax package signed in May that lowered tax rates and capped property tax revenue collected by local governments and counties. The new measure adds about $254 million in cuts to the $1.3 billion in cuts implemented in the spring.

It is expected that between $60 and $80 will be saved on the typical homeowner’s property taxes in the 2025 tax year, and about $179 the following year. That’s in addition to the average savings of $400 this year compared to the previous package.

More importantly for local governments and legislative leaders, the deal passed Thursday will see conservatives and business groups back a pair of ballot measures that would have imposed stricter growth limits and deeper cuts — initiatives 50 and 108 — to withdraw them from the November state conference. mood. Although the specific changes proposed by Initiative 108 would have ultimately saved the average homeowner more than $500 a year, officials feared the financial toll on state and local government budgets.

Polis says he expects to sign the bill into law next week. Before that, here’s a look at several dynamics on display this week.

The power of power politics

Sen. Chris Hansen, a Denver Democrat and lead sponsor of the property tax bill, opened the final debate Thursday by defending the process that spawned the special session. He sought to refute recurring accusations — including from his own colleagues — that the bill he sponsored was the result of a “backroom deal.”

“I think a dispassionate observer would conclude that this was a public process,” he said, ticking off the public meetings at which details of the plan were laid out. And he noted that legislative committees have taken public testimony in recent days.

The deal was negotiated out of public view by Hansen, other legislative leadership, the governor’s office and the initiatives’ supporters. Although it is true that its outlines were publicly revealed to the state earlier this month Real Estate Tax Commissionthose details had already been agreed upon.

While bipartisan support for the plan was bipartisan, lawmakers from both parties chafed at being called back to the Capitol largely to ratify a deal they themselves could not have made — and which they largely could not change. Some Republicans criticized the deal for not cutting taxes enough, while progressive Democrats said it worsened inequality in the state and did not do enough to help lower-income property owners or renters.

Rep. Jennifer Bacon, a Democrat from Denver, spoke at length Wednesday about the need to defend the Legislature’s role in government, saying “no” votes would send a “signal” that “if you want to tell us what we need to do, you to understand that not everyone feels like it. Most lawmakers in the House rallied in support of her as she spoke.

But ultimately the bill was passed. Comfortable. In total, only 22 lawmakers (out of 100), including Bacon, voted against the bill during its tour of the Capitol.

Outside interests had a real influence

Several lawmakers this week derisively referred to Michael Fields, the president of the Advance Colorado Institute and the main proponent of the ballot initiatives, as “governor.”

That criticism only increased when no one from Advance Colorado or its ally, Colorado Concern, a business-oriented advocacy group, testified in committees in support of the bill.

Polis, asked about the name, pointed to the nearly 200,000 Coloradans who signed petitions and brought the initiatives to a vote, adding: “I think the Legislature has found a better way to address property taxes than risky and divisive ballot initiatives.”

Separately, Rep. Matt Soper, a Delta Republican, noted that lawmakers hate feeling like a rubber stamp.

“We’ve thought about that a lot,” he said, “because we also have to be leaders, and we also have to stand up and say, ‘Personally, this is not what I would have wanted.’ … I feel comfortable with what we did because it was a real compromise.”

In a statement, Fields called the bill’s passage “a huge victory for Colorado taxpayers,” who faced a property tax increase of 30% or more.

An end to the property tax wars?

As part of the deal, Advance Colorado has pledged not to pursue any other property tax ballot initiatives for at least six years — a period that extends beyond the remaining terms of Polis and many lawmakers — if the agreed-upon terms are met. meet.

That deal was concluded in writing, although there is no legal condition attached that makes this agreement more solid.

“We get permanence. We’re going to have stability here,” Sen. Barbara Kirkmeyer, a Republican from Brighton who was involved in the negotiations, said Thursday. “So hopefully this will end the property tax wars as we get to a permanent solution. In the past we couldn’t get the job done. It doesn’t mean we failed; We just didn’t quite succeed.”

Others weren’t so sure.

Rep. Judy Amabile, a Boulder Democrat who voted for the deal and said it was the right thing to do, said its passage would give lawmakers “a reprieve.” Rep. Emily Sirota, a Denver Democrat who voted against it, said she would be “shocked” if this latest bill actually ends the property tax battle at the Legislature.

“We’ll come back here again and do the same thing,” she predicted.