State lawmakers are headed back to the state Capitol this month after Gov. Jared Polis Thursday called for a special session to deal with property tax relief.

The special session will start on Nov. 17 and could run at least three days, the minimum it takes to get legislation through both chambers of the Colorado General Assembly.

Lawmakers will return to the Capitol in the wake of the landslide defeat of Proposition HH on Tuesday, when voters rejected the Democrats’ property tax fix by more than 20 percentage points. The measure asked voters to use Taxpayer’s Bill of Rights surplus revenue – which is usually refunded to taxpayers – to reduce property tax increases, fund school districts and backfill counties, water districts, fire districts, ambulance or hospital districts and other local governments.

Polis had previously demurred when asked what his “plan B” is in case Proposition HH failed.

To emphasize the magnitude of the challenge, the governor’s began Thursday’s news conference by breaking an emergency glass with a bat.

He noted the tight timeline available for dealing with the 2023 property tax crisis, as assessors must finalize assessment rates no later than Dec. 15.

“We would have loved to have another two weeks, but local assessors are waiting to implement whatever changes the legislature makes,” the governor said.

The call is limited to the current tax year, Polis said. He noted the legislature had set aside $200 million to start paying for property tax relief.

“I am calling this session to urge the legislature to bridge partisan divides and put people over politics to provide immediate property tax relief to Coloradans facing extreme spikes from their 2023 property bills,” Polis said. “Coloradans are looking to us to reduce property taxes and provide relief to families, and as we always have, we will work to deliver solutions that protect and enhance the Colorado we love.”

Polis indicated he favors reductions in value on homes as part of the solution, although he said a combination of value reductions and a cut in the assessment rate is probably a good path forward.

“The General Assembly should consider taking legislative action to create a property tax relief package to offset value increases that also balances the interests of schools and local governments that are funded with property tax. This could include but is not limited to changes to reserve policy, general fund, and TABOR tax refund mechanisms,” he said in the call.

And as reported by Colorado Politics earlier, Polis also asked the legislature for a “blue ribbon panel” that would come up with a long-term solution.

“In the meantime, we want to do everything we can to provide relief to renters and homeowners,” he said. 

He offered an explanation for voters’ decision to reject Proposition HH, pointing to a “formulaic change to TABOR” and what could happen in the outyears. People may have wanted more specificity in how the proposal would save them money, he said.

The governor also asked lawmakers to tackle another issue in addition to property tax relief: food and nutrition benefits for children. The call noted a recently passed federal law that provides Colorado with an opportunity to provide food and nutrition benefits to more than 300,000 Colorado children during the summer months, beginning as soon as the summer of 2024.

“Passing legislation as soon as possible will enable us to stand up this critical program in time for this summer and access approximately $35 million in federal benefits,” he said. 

Advance Colorado’s Michael Fields, who led the effort to defeat Proposition HH, welcomed the special session. 

“It is great that the governor has heeded calls to bring the legislature back to work. The best remedy is to enact a very significant rollback in property tax rates and then put in place an enforceable cap on future tax revenue growth,” he said. “This addresses the current crisis and prevents future unexpected tax spikes in the future.”

Democratic leaders noted voters’ rejection of Proposition HH and outlined what they believe lawmakers need to do next. 

“We always knew that if Proposition HH failed, property taxes would rise dramatically for thousands of Coloradans, which would make Colorado’s cost of living even more out of reach for so many,” said Senate President Steve Fenberg, D-Boulder. “The voters had their say about a long-term, comprehensive approach. Our caucus will now be laser-focused on providing short-term relief to those who are most vulnerable to the rising cost of living – which means working families, renters, and those on fixed incomes – while protecting our schools and fire districts.”

“We have a responsibility to deliver real results on the issues that matter most to Coloradans, and that’s what we’ll do in this special session as we continue working to address the rising cost of living,” added House Speaker Julie McCluskie, D-Dillon. “With rising property values leading to unaffordable tax increases, our goal is to responsibly provide real relief to the people who need it most while protecting schools, fire districts and libraries.”

“In this special session, we will work to boost support for renters and working people and deliver urgent property tax relief for Coloradans,” she added. 

Republicans who have been asking Polis since last May for such a special session are hoping not to be left out of the conversation.

“While it’s disappointing that it took the overwhelming defeat of Prop. HH to get their attention, it’s certainly my hope that the governor and Democrats will now agree to common sense reforms to Colorado’s property tax mess and not just a simple band-aid to a complex problem,” said House Minority Leader Mike Lynch of Wellington. “Instead of addressing the concerns of homeowners a year ago, we now have only days to correct a mess that was avoidable,” added Lynch.

“Coloradans have been bracing for months and have been asking for real and clean property tax relief,” added Assistant House Minority Leader Rose Pugliese of Colorado Springs. “We proposed bills during the regular legislative session to address this and then presented solutions once again when we called for the special session a few weeks back. Hopefully, during this special session the Democrats will come to the table in good faith to provide real and clean property tax relief.”

Among the proposals being discussed by lawmakers is a freeze on assessment rates, sources earlier said, with the creation of a task force in the 2024 session that will work on a long-term solution.

If any of this sounds familiar, it should.

Rep. Lisa Frizell, R-Castle Rock and Sen. Byron Pelton, R-Sterling, proposed very similar ideas in legislation last January. House Bill 1054 died in the House Finance Committee. While the idea got positive attention from some Democrats, only one on the committee – Rep. Bob Marshall of Highlands Ranch – voted for it.

The proposal would freeze 2023 property reassessment for most classes of property and make additional changes to property valuations and assessment rates for the 2023 and 2024 property tax years. The freeze on assessments meant valuations taken in 2021 would remain in place until 2025.

Frizell, who previously served as Douglas County’s assessor, told Colorado Politics Wednesday that, “if we’re going to do something, it needs to be meaningful and easy to understand for our citizens, and provide real relief.”

She said an assessment rate of 6.7%, which was the proposal for residential assessments in the failed Proposition HH, remains too high.

Senate Bill 305, which contained the task force idea, died in the Senate Finance Committee. 

Polis began talking to lawmakers on both sides of the aisle on Tuesday when it became obvious that voters were going to soundly reject Proposition HH, the proposal Democrats crafted in the final days of the 2023 session.

Other proposals being floated is a reduction in property valuation, which would benefit low- and middle-income homeowners.

One question is how to pay for it. Lawmakers set aside $200 million in 2022 to begin covering the cost, but that won’t be enough.

There’s also a bit of a sweetener out there, should the special session solutions contain certain components.

Fields has offered to drop his group’s next ballot initiative that has already been approved for the 2024 election. Ballot initiative #50, which is a constitutional measure, would decrease property tax revenue in years when statewide property tax revenue is projected to grow more than 4% over the prior year, unless voters approve a ballot measure allowing for the additional revenue to be retained.

Voters have been more than willing to approve ballot measures that drop the state’s income tax rate. They approved those reductions twice – in 2020 and 2022. But they’ve been less willing to tinker with property taxes, rejecting in 2021 a measure that would have reduced both residential and non-residential property tax rates and that was backed by Fields and his allies.

Fields told Colorado Politics Wednesday that he prefers a solution that would come from the legislature and the governor.

He said his condition for dropping Initiative #50 is for lawmakers to come up with a “real” property tax reform.

“From our perspective, there has to be a significant cut for next year’s increases, and there has to be a long-term cap,” he said.

The number could be higher than what’s in Initiative #50, he said.

“We want to stop these significant increases, and 30% or 40% is not close. We’d rather not go to the ballot, but I’m not confident they’ll do anything significant and we’re probably going to keep moving forward,” he said.