(The Center Square) – Coloradans who rent their homes won’t realize any savings if a November ballot initiative passes as they will lose money through a reduction in tax refunds, according to an analysis.
The Common Sense Institute, a nonprofit public policy organization, published a brief on the effects of Proposition HH on the 768,000 Colorado households renting their homes. The initiative will reduce property taxes, but total tax payments for rental property owners will still increase, according to the publication.
“The bottom line is renters are the biggest losers of Proposition HH,” CSI Executive Director Kelly Caufield said in an interview with The Center Square. “It’s a complex ballot measure and it’s the most important measure we’ll vote on this November.”
In addition to not getting any benefit from property tax relief, renters won’t get the same amount from Taxpayer’s Bill of Rights refunds if the measure passes, the report said. For those filing joint tax returns, the average reduction in TABOR refunds is projected to be $5,119 over a 10-year period and $2,559 for single filers.
“So [renters] are paying for this, but they get no benefit,” Caufield said. “They will not receive a reduction in property taxes because they don’t pay property taxes.”
In addition to the state retaining more taxpayer revenue under the TABOR provisions if the initiative passes, the legislature could extend it through 2040.
“Statewide, the potential aggregate property tax revenue reductions under Proposition HH amount to $9.92 billion through 2032, while the potential reduction in TABOR refunds total $9.9 billion,” the report stated. “Should the legislature choose to extend Proposition HH through 2040, which it could do without taxpayer approval, there could be a net tax increase of $20.1 billion.”
Prop HH, if passed, would provide up to $20 million for rental assistance. The report estimated 2,600 to 4,000 of Colorado’s renters would receive between $5,000 and $7,500 in benefits.
“We appreciate that some dollars are going toward rental assistance,” Caufield said. “But when you divide by the numbers of renters in the state, it’s not significant dollars.”
