Better of Two Evils or Confusing Mess?
Trevor Phipps
The property tax debacle at the state level finally came to a temporary conclusion after bills were passed during a special legislative session.
Although not everyone was pleased with the outcome of the special legislative session regarding ways to reduce property taxes, the result was that two potentially harmful ballot initiatives will not get voted on in November. Some local leaders and government officials, though, are worried about the confusion for local taxpayers.
After property valuations skyrocketed during the last appraisal period, government officials across the state from local municipalities to state lawmakers have all been scratching their heads and searching for ways to reduce the property tax burden placed on residents. Several proposals have been brought up, but little have found ways to appease politicians on both sides of the aisle until now.
In the end, the state lawmakers approved a bipartisan bill that will reduce the assessment rate for residential properties across the state. The bill was approved with bipartisan support due to the fact that passing the bill would remove Initiative 50 and Initiative 108 from the Nov. ballot.
After the measures passed in both the state House and Senate, Colorado Governor Jared Polis said he would sign the bill into law once the two ballot measures were officially removed. “Today we took an important step for Colorado to end the property tax wars,” Governor Polis said in a press release following the special session. “With this bipartisan effort, we are saving hardworking Coloradans money on property taxes, saving households money on utility bills, making our small businesses more competitive, and protecting funding for our schools.”
Earlier this year, two lobbyist groups called Advance Colorado and Colorado Concern urged voters to vote in favor of Ballot Initiatives 50 and 108 saying that the measures would bring over $1 billion in annual tax relief to state residents. However, as soon as the initiatives came out, several government officials (including Teller County Commissioners) spoke out against them.
In fact, fire chiefs from across the state came out and said that the property tax reductions in the two proposed ballot measures would lower taxes to the point where the departments would not be able to offer the same emergency services they offer now. Teller County Commissioners also spoke against the measures saying that if they were passed, the county would take a serious financial hit and services could suffer.
But now that state lawmakers passed House Bill 24B-1001, the two lobbying groups have promised to remove the measures from the ballot. “Today’s vote marks a huge win for Colorado taxpayers who have been hit with 30 percent average property tax increases,” Advance Colorado President Michael Fields said in a press release. “For two years, we have said the solution taxpayers need is to cut taxes significantly and then put a cap in place so Colorado can avoid this crisis in the future. This bill gets that job done.”
Teller Commission Chairman Endorses Tax Relief Compromise
Throughout the special legislative session, many lawmakers felt that they were having to choose between the better of two evils, being the new property tax bill and the two proposed ballot measures. And according Teller County Commission Chairman Bob Campbell, the two ballot measures would have been extremely detrimental to the county’s finances. But, the new bill will only have minor effects on county funds.
Campbell said that he was involved with the issue for several weeks as state lawmakers tried to come up with ways to prevent Initiatives 50 and 108 from reaching the ballot. “If one of them passed let alone if both of them passed it would be a killer for local governments,” Campbell said.
Campbell himself said he spent 100 hours helping state lawmakers crunch numbers and come up with an agreeable solution to property tax reductions. Campbell said that the newly passed bill is confusing, but it will lower how much taxes people pay on residential properties.
He also said that the negotiation made with the two lobbying groups is also a way to keep changes in property taxes more consistent for the next few years. With all of the changes over the past two years, Campbell said it was tough for local governments to plan their revenue.
“Essentially we made a deal to create some predictability and not get killed with both of these initiatives,” Campbell said. “Because both of these initiatives started with, ‘shall taxes be lowered to…’ Every tax payer in the world is going to say, ‘yes, taxes should be lowered I’m voting for it.’ But they have no idea what some of the details and the thresholds and backfills and stuff are that were built in because they didn’t go any further than ‘lower taxes.’”
He said that now property taxes will be more predictable and there will be some caps involved. But all local governments will still be getting more money than they would have if the two ballot measures were passed. And, property taxes will still be reduced for residents.
According to an article published by Colorado Public Radio, HB 1001 permanently reduces property taxes for Colorado homeowners by around two percent. Therefore, a resident who lives in an area in the state that has an average tax burden would save about $50 per year for a $500,000 house.
Some leaders, though, are worried about the confusion of the final product. During a Green Mountain Falls Board of Trustees meeting last week, Mayor Todd Dixon described the final bill as some of “the most confusing legislation” he has ever dealt with. “It is horribly confusing,” said Dixon. “We (the Green Mountain Falls government) are not going to get any more tax revenue.”
El Paso County assessor officials have also expressed concerns about the confusion for property owners, with the newly adopted package.
