(The Center Square) – Colorado lawmakers passed a key property tax bill with bipartisan support on Wednesday, the last day of the legislative session.
During the last few years, average home values in many Colorado areas increased by as much as 40%, resulting in drastic increases in assessments and property taxes.
In the final days of the 2023 session last year, the General Assembly moved to put Proposition HH on the November ballot. It proposed reducing the state’s assessment rate for residential property from 6.75% to 6.7% for 10 years and was defeated by more than 60% of voters. Democratic Gov. Jared Polis called a special session after the defeat and signed a bill similar to Prop. HH and allocated $200 million to backfill lost revenue for education and local governments.
This year’s effort, Senate Bill 24-233, will reduce assessment rates and extend reductions in the value of property tax assessments during the 2024 tax year. The legislation will carry over temporary assessment rates and actual value subtractions from the 2023 tax year. For residential property, a 6.7% assessment rate will be applied to the actual value of the property minus $55,000 or the amount that reduces the assessed value to $1,000, down from an estimated 7.06% rate without any subtraction to the value.
The bill, which was introduced on Monday, passed by a 33-2 margin in the Senate on Tuesday, and 62-1 on third reading in the House on Wednesday.
“I’m really proud that what we bring before you today does not include backfill on a grand scale like we’ve seen for the last two years,” Rep. Lisa Frizell, R-Castle Rock, said during debate. “Members, this is for the good of the citizens of Colorado.”
Colorado voters will decide on two property tax initiatives in November. Initiative #50 would require voters to approve government retaining property tax revenue if total statewide property tax revenue is projected to increase more than 4% than the previous year. Initiative #108 would set the valuation for the assessment of residential property at 5.7% of the actual value of the property beginning in tax year 2025.
“There are ballot initiatives lined up that will cost this state $3 billion per year in backfill to local government entities,” Frizell said. “That’s $3 billion of general fund budget dollars. … That’s a significant amount of money, but it’s important to understand the general fund is only about $16 billion.”
Michael Fields, president of Advance Colorado, a conservative advocacy group, led the ballot initiative to cap property taxes and is critical of the legislation.
“Your bill raises taxes on homeowners,” Fields posted on X, the platform formerly known as Twitter. “Where is the concern for the Colorado families who are paying $3.3 billion more in property taxes in one year? Or the concern for local fire and law enforcement who deserve the money more than the state?”
The Common Sense Institute, a nonpartisan research organization, published a report on Wednesday criticizing the legislation and stating Coloradans will still see an increase in property taxes if the bill passes.
“Next year, Colorado homeowners will pay the same elevated amounts from the spike in 2023,” according to the report. “In 2025, the same year as the next reassessment period, property tax rates will increase, setting Coloradans up for another increase in their property tax bills. Crucially, any assessment of this bill should refer to what Coloradans currently pay in property taxes, not what they would pay if the actions from prior sessions were to sunset.”
