Special Tax Legislative Session Gets Political; Sparks Partisan Debates

Impacts for Local Governments Still Uncertain

Rick Langenberg

Can’t we just get along?

This familiar question invaded the state Capitol just before the Thanksgiving holiday and served as a theme of a special legislative session, aimed at dealing with the controversial issue of skyrocketing property taxes Colorado residents now face.

The result of this heavily partisan squabbling, though, could hit area governments and local taxpayers where it hurts the most: in the pocketbook.

Colorado Governor Jared Polis recently called for a temporary special session, following the strong defeat of Proposition HH, which sought property tax relief by offering proposed relief funds by using monies allocated from the Taxpayer’s Bill of Rights (TABOR) law. This relief measure got heavily rejected by Teller County voters, and didn’t do much better at the state level, losing by nearly 20 percentage points.

Due to unprecedented value hikes in the most recent reassessment period, homeowners and property owners from across the county and many parts of the state are staring at huge tax hikes.

State Democratic and Republican leaders agree that this issue needs to be addressed, and are answering the governor’s call for action, but disagree on the solutions, and whether a temporary or long-term fix should get employed; and how much relief should occur and who should get the breaks.

The special session ended on Nov. 19, with the Democratic proposals winning the day, but the final product netting more questions than answers. Nearly 10 tax-relief proposals are expected to get signed by the governor shortly, but all of these have not resulted in any bipartisan support.

Already, several local governments are moving ahead due to the strong message relayed by the voters concerning state Proposition HH.

But at the same time, officials concede that the outcome of this session, and the pending bills presented, could impact their bottom line.  Virtually every government body in the region opposed Proposition HH, with several area entities contending that it would have led to hefty budget reductions.

Kelly Flenniken, executive director of Colorado Counties, Inc. pleaded with lawmakers during the special session to partner with local governments for future property tax solutions, according to a report in The (Colorado Springs) Gazette. At issue is the formation of a task force to study long-term solutions. The final tax plans developed could have serious consequences for Teller County and other local governments.

Regardless of future impacts, government leaders are now proceeding with the understanding that Proposition HH isn’t going to happen.

The Cripple Creek City Council recently had a workshop and outlined its probable fiscal course of action. The council agreed to reject the pro-HH model, which would have resulted in the loss of close to $32,000 in revenue.  Instead, the council favored the status quo direction, which would provide for a 39 percent hike in property tax revenue next year for a total of $207,665.  The status quo route would still result in a reduction of the city’s mill levy.

Finance Director Paul Harris cautioned that the vast majority of this increase is due to the valuation increase from the construction of the Chamonix resort, slated to open on Dec. 26.

He also warned the council that the town could be impacted by the results of the special session and legislation that is crafted from this several-day gathering.

No smooth sailing at state level

According to media reports, this special session got off to a rough start, with the hopes of a swift non-partisan gathering getting slashed from the outset.  The public access to the litany of bills got debated, shortly after the session started, with Republicans indicating that the public needs to be involved more, while the Dems accusing the GOP of delay tactics.

The Dems have referred to the GOP approach as just unrealistic, with a proposal for funds getting reduced from the state government that may be needed in cases of future financial hardship.

The Republicans have favored a cut in the assessment rate, and cite the importance of an overall property tax reduction, while Democrats appear to favor a more encompassing package, aimed at also helping renters and those having hard times. And once again, the use of TABOR funds is coming into play.

Altogether, more than 10 bills were proposed by lawmakers dealing with aspects of the property tax issue. A variety of these measures are extremely complex.

Based on plans advanced at TMJ’s press time, and with the ending of the special session on Nov. 19,  the proposed solutions to the tax situation call for

the following plans:


*Exempting $50,000 from residential and multifamily properties’  tax liability calculation; and cutting the residential assessment rate to 6.7 percent, which is down from 6.765 percent.

*Setting a fund of $200 million for tax relief to be paid to local entities impacted by the reduced tax revenue. Of that $146 million would go to schools and fire districts, with the rest going to the state’s counties and special districts and other governments.

*Increasing to a 15 percent growth rate under which counties would be eligible for the backfill in revenue that they would lose as a result of the legislation.

*Adding ambulance and EMS entities to the entities covered under the relief package.

*Forming an extensive task force, from a variety of interests, to come up with a long-term tax solution.

Still, many questions haven’t been resolved or must be tackled under the near future, such as relief for commercial property owners.  In fact, the session prompted more questions than answers and highlighted vastly differed ways of handling the problem by leaders of the two major parties. The exact role of the task force, and the make-up of the group, has prompted many concerns.