Colorado’s legislators this week advanced proposals that seek to offer property tax relief and provide an early TABOR refund, saying the measures would help residents at a time of soaring inflation and spiking energy prices. 

The House unanimously approved Senate Bill 238, which provides homeowners $274 in average property tax refund based on a home value of $500,000, with more for higher-valued properties. The property tax relief applies to 2023 and 2024. The Senate concurred with the House’s version and adopted the final version, also on a unanimous vote. The measure now heads to Gov. Jared Polis for signing.

“The legislation we passed today will prevent tax increases on many small businesses,” Rep. Mike Weissman, D-Aurora, said in a statement. “It builds on our earlier work to lower property taxes for homeowners and businesses and will save the average homeowner $274 on their property taxes.”

All told, the bill seeks to provide $700 million in property tax relief through several mechanisms: a change in assessment rates for commercial properties from 29% to 27.9% and a reduction of $30,000 in taxable valuation of a business property. The latter would help small businesses, proponents say, noting it’s the first reduction in commercial assessment rates in 40 years. 

On the residential side, assessment rates would change from 6.95% to 6.765%. The bill also reduces the taxable value of homes by $15,000. Property taxes are calculated by multiplying the property valuation by the assessment rate. 

The bill “backfills” lost revenue to counties through those property tax reductions, although not completely. Small counties with low rates of appreciation – defined as less than 10% – would receive 100% of their property tax revenues. Small counties with large increases, such as mountain resort communities, would be reimbursed for 90%. Large counties would receive 60%, which means a smaller increase in their property tax revenues. 

“Rising property values bring a price tag of higher property taxes” said Rep. Patrick Neville, R-Castle Rock, the bill’s co-sponsor, in that same news release. “I’m excited to sponsor a bill for a $700 million property tax decrease and a net overall tax decrease of $500 million.” Neville added that he dislike taxes in general, but property taxes are the worst kind of tax. Lowering property taxes will help with the inflationary pressures families are experiencing and is much needed in Colorado.”

The second bill on tax relief, Senate Bill 233, won preliminary approval in the House Thursday. The measure would send about $400 to each individual taxpayer in late summer or early fall. The bill awaits a final vote in the House Friday, and if approved will head back to the Senate for their review of House amendments.

The Polis administration-backed legislation taps Taxpayer’s Bill of Rights surpluses that were already scheduled to be paid out in 2023 and sends them to taxpayers this year. The administration also refuted claims that the refund – which residents will get just as political campaigns are ramping up for the November election – is an election-year ploy, insisting Coloradans need the relief now in the face of high housing, fuel and food costs. 

Under current law, taxpayers would get their TABOR refund in the spring of 2023. Polis, with backing from legislative leaders, plans to change the schedule by sending the cash to taxpayers in August this year – just a little over two months before the November election and just before big campaign ads will start hitting voters’ phones, social media, mailboxes and TV and computer screens. 

Michael Fields, president of the conservative-leaning think tank Advance Colorado Institute, earlier noted the timing of the refund.

“It’s money that would have to be refunded anyway. They just changed how it’s refunded – and are sending it before the election,” he told Colorado Politics. “This is an election year ploy to try to get Coloradans to forget about all the fees and taxes that Democrats have passed during the last 3 years.”

The bill’s proponents countered that Coloradans need the money now, rather than later. 

“Families who are struggling will get more money back, and they’ll get it back sooner to help pay for gas, groceries, rent and everyday necessities,” Rep. Tony Exum, Sr., D-Colorado Springs, said in a statement. “We’re delivering this relief as soon as we can because people are struggling now, and we can give it back in a fair and more equitable way that helps people sooner.”