Two days after voters handed Gov. Jared Polis and his Democratic allies a stinging loss at the polls over his property tax relief measure, the governor is readying a proposal for a special session with an announcement at 10:15 this morning, Colorado Politics has learned. 

Sources told Colorado Politics the special session could start as soon as next week.

Among the proposals being discussed by lawmakers is a freeze on assessment rates, sources 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. Under that measure, the 22-member task force would include six members – three from each chamber; the state property tax administrator; a county assessor; representatives from the local government organizations, including Colorado Counties, Inc and the Special District Association; two representatives of school boards; and, five county commissioners, each representing a different part of the state. The task force would also include five nonvoting members representing Colorado Concern, the Colorado Apartment Association, the Colorado Chamber of Commerce, the Commercial Real Estate Development Association and a representative from the Building Owners and Managers Association International.

Polis – who can convene a special session to deal with specific issues, such as the one he authorized in 2020 over COVID relief – 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.

The urgency in coming up with at least a short-term solution is due to deadlines in state law around mill levy rate setting for the upcoming tax year. 

On Dec. 10, assessors must issue their final certificates of valuation, according to the Department of Local Affairs. Five days later, assessors must certify the next mill levy rate with county commissioners – that’s the deadline that lawmakers must respond to if they are to provide any kind of tax relief.

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.

Advance Colorado’s Michael 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.