What will lawmakers tackle when they convene at the state Capitol on Friday for a three-day special session aimed at providing relief against soaring property taxes? 

The answer is that proposals are being hammered out this week. 

But already, some dividing lines have emerged: Republicans don’t want a solution that includes tapping Taxpayer’s Bill of Rights refunds, the core component of Proposition HH, which voters soundly rejected last week. 

Democrats, meanwhile, are leaning in on some of the elements of Proposition HH, including redirecting TABOR dollars to local governments, which would see their anticipated revenues slashed under proposals that both of the sides of the aisle are contemplating.    

Gov. Jared Polis, meanwhile, asked for more than just property tax relief, although he couched his requests under that issue.

Here’s what lawmakers are being asked to consider:

• Reduce property tax burdens for 2023 only

• Deal with the effects of the revenue reductions on schools and local governments by paying for it with TABOR surplus, general funds and the state reserve dollars

• A TABOR refund mechanism for 2023 only

• Rental assistance for 2022-23 only

• Adjust the Earned Income Tax Credit for 2023, utilizing resources available from the 2022-23 fiscal year; and, 

• Create a process to review and make recommendations on long-term property tax relief

Lawmakers will also deal with a non-property tax issue: authorizing food and nutrition benefits for Colorado children, tapping into a new federal program.

So, how are lawmakers interpreting the call for the special session that is set to begin on Nov. 16?

One Democratic omnibus proposal offers these elements:

• Property taxes for residential single family would keep the current assessment rate but decrease the value exemption of a home by $75,000. (Currently, the reduction is at $15,000). Property taxes are then calculated on that reduced value.

• For multi-family residential homes, such as condos and townhomes, the value exemption would remain the same but assessment rates would be lowered from 6.765% to 6.7%.

• Commercial properties, including hotels, motels, lodging and industry, would keep the same assessment rate but the value exemption would be increased from $30,000 to $50,000.

• The so-called “backfill” to protect local governments from revenue losses would use the $200 million set aside in Senate Bill 22-238 for counties with less than 300,000 in population. That excludes the top nine largest counties by population.

• An equalized TABOR refund for 2023;

• Expansion of the earned income tax credit, to be paid for with TABOR surplus. 

• Renters refunds and credits, similar to what was in Proposition HH, which would have set aside $20 million for that purpose.

Other proposals focus more narrowly on elements of the governor’s special session call, such as renters’ relief, property taxes, the flattened TABOR refund, and expansion of the Earned Income Tax Credit.

Notably absent from the Democrats’ proposals so far is the process for looking at long-term property tax relief.

Republicans who carried a similar bill in the 2023 session have included the creation of a task force to look into a long-term fix.

A draft bill from Sen. Barbara Kirkmeyer of Brighton and Rep. Rose Pugliese of Colorado Springs advocates for the task force, a key provision of Senate Bill 23-305, the GOP legislation that went nowhere in the last session.

Under their proposal, the 23-member group would draw on the following people: House and Senate lawmakers with local government experience; the state’s property tax administrator; a local government expert appointed by one of the organizations that represents local government; a county assessor; someone with experience with special districts; county commissioners; school board representatives; and, five non-voting individuals representing several nonprofits, such as Colorado Concern, the Colorado Chamber of Commerce, realtors and building owners.

The property tax relief part of the Kirkmeyer-Pugliese bill would reduce the assessment rate for multi-family residential real property and residential real property to 6.5% (down from 6.765% for residential and 7.15% for multi-family residential). It would also pay for any lost revenue to public schools using general fund, and use the SB 238 money to cover local governments’ revenue losses.

A draft proposal from House Minority Leader Mike Lynch of Wellington and Sen. Byron Pelton of Sterling is nearly identical.

Pugliese told Colorado Politics on Tuesday the Republican plan calls for clean property tax relief that does not include tapping TABOR refunds.

“We feel very strongly the voters have spoken to defeat Proposition HH, and we will respect the will of the people,” she said.

Pugliese said using TABOR refunds for any kind of a backfill to make local governments whole is a non-starter for Republicans.

She noted the September revenue forecast, which estimated the state would have an additional $1.2 billion in revenue. That money that could be used for property tax relief without tapping the TABOR surplus, she said. 

Pugliese also said they’re pushing for the task force to get local governments together, since property taxes are primarily their purview.

“We have a strong plan. We’ve left room for Democrats to sign on,” she said.

Both Pugliese and House Speaker Julie McCluskie of Dillon indicated the two sides are talking this week in hopes of finding a bipartisan path forward, something Polis said he wants to happen in the special session.

McCluskie said she’s been speaking with her House counterparts on the Republican side.

“I really believe it’s a moment to put our politics aside and look for where we have found common ground before,” she said,

She said SB 238, which did tap the TABOR surplus in 2022, was a bipartisan bill that got unanimous support in the House.

Offering tax relief via the special session is the right approach, McCluskie told Colorado Politics, adding, it’s an “opportunity for us to deliver property tax relief,” as well as recognize that low-income Coloradans and renters also need support.

While the session is on a compressed timeline – she hopes they’ll by done by Sunday – she says the conversations she’s having with members is filled with enthusiasm to address the issues.

“Our call to deliver property tax relief can be achieved,” she said. “We are really committed to making sure we think of renters, that we provide emergency rental assistance, support families with the earned income tax credit.”

That commitment also extends to providing equalized TABOR refunds, she said. 

McCluskie said she believes both Democrats and Republicans see the opportunity to deliver property tax and renter relief in 2023. 

“I’m looking forward to seeing a full house on Friday and learning about the legislation members are working on,” she said. 

Will the special session look like the last three days of the 2023 session, when House Democrats imposed rules that limited debate and amendments offered to the property tax bills by Republicans?

“We are in a moment of looking forward not looking back,” McCluskie responded. “We’re looking for what resonates with voters and constituents. There’s a longer term property tax solution the state needs to solve, but in this moment, [we’re working on] how to provide relief and problem solve.”