(The Center Square) – As Democratic Gov. Jared Polis signed bills this week addressing Colorado’s income and property taxes, critics said the legislation isn’t adequate.
Senate Bill 24-233 lowers assessment rates for property taxes for residential property beginning in the 2024 tax year. A home valued at $700,000 or less could have its annual property tax reduced by $300 to $400, according to supporters. The law carries over temporary assessment rates and actual value subtractions enacted for the 2023 tax year. The bill passed 57-7 in the House and 35-0 in the Senate.
The assessment rate is reduced from 7.06% to 6.7% on the actual value of residential property, minus $55,000 or the amount that reduces the assessed value to $1,000, according to the bill’s fiscal note. The assessment rate is reduced from 6.8% to 6.7% on the actual value of a multifamily residential property, minus $55,000 or the amount that reduces the assessed value to $1,000.
Beginning in tax year 2025 and thereafter, two assessed values will be calculated for residential property, one for mill levies assessed by school districts and another for local governments.
“We delivered meaningful results for Coloradans and there is no reason for deep-pocketed special interests to move forward with ballot measures that would devastate our communities, school funding, and public safety resources,” House Speaker Pro Tempore Chris deGruy Kennedy, D-Lakewood, said in a statement.
Michael Fields, president of Advance Colorado, said in a statement on Wednesday that two November ballot initiatives will provide Coloradans more sufficient tax relief.
“This so-called property tax relief plan offers a lot of hype but little new hope for taxpayers across Colorado,” he said. “The more the details of this new law are studied, the more its shortcomings are brought to light.”
“With two simple initiatives on the November ballot, voters can cut their property taxes and then put a solid cap in place to ensure the tax spikes we just saw cannot happen again,” Fields added. “Our plan prevents government from growing faster than taxpayers’ wages.”
Senate Bill 24-228, also signed into law, temporarily lowers income tax rates, implements a six-tier formula to determine Taxpayer’s Bill of Rights refunds and increases income tax rate deductions if surpluses exceed certain levels.
The bill alters mechanisms used for TABOR refunds for fiscal years 2023-2024 through 2033-2034. The 32-page bill also creates a new refund mechanism for any TABOR surplus collected for fiscal year 2024-2025 through 2033-2034. The bill passed 62-1 in the House and 33-2 in the Senate.
The bill also reactivates a temporary income tax rate deduction as the second TABOR refund mechanism for tax years 2024 through 2034. The income tax rate for tax year 2024 is temporarily reduced from 4.4% to 4.25% to refund a portion of the surplus for fiscal year 2023-2024, according to the bill’s fiscal note. Thereafter, the income tax rate reduction will be reduced based on the amount of TABOR surplus after local governments are reimbursed by the state for homestead property tax exemptions.
“Every year as Governor I have called for income tax cuts and I am happy to deliver on that promise with a rate reduction from 4.4% to 4.25% along with much more today,” Polis said in a statement announcing the signings. “These responsible tax cuts will help turbo-charge Colorado’s economic growth and success.
