As lawmakers prepare to head back to the Gold Dome for a special session to deal with property tax relief on Friday, business leaders worry that a bipartisan deal is unlikely, despite Gov. Jared Polis’ request last week for a solution both sides could agree on. 

Loren Furman, president of the Colorado Chamber of Commerce, said this week that she hopes lawmakers come up with a deal and that they do so before Friday.

“You have a much stronger position if you come to a deal” beforehand, she said. “Both sides should come together, find the path they want to go down and then proceed with the special session.”

Her fear, however, is that the special session could be little more than a repeat of the last three days of the 2023 session, when Democrats rammed through the bill that became Proposition HH and shut down debate and amendments from Republicans. That led to a walkout on the last day by House Republicans.

“When you saw what happened in the final three days, dealing with tax policy, it’s a process that requires a deliberative approach. This is just as complicated, and trying to get to consensus at the last minute, that’s not good for state of Colorado,” she said.

Initial proposals indicate Democrats are still planning to tap TABOR refunds to pay for property tax relief, which isn’t sitting well in business circles, and it’s a solution that business leaders point out voters said “no” to pretty emphatically last week.

The governor’s call for a special session asked for short-term property tax relief that would apply only to the 2023 assessment year, along with a laundry list of other requests dealing with TABOR tax refunds and rental assistance. He also asked lawmakers to look at 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 children during the summer months, beginning as soon as the summer of 2024.

But the focus of the session, which must last a minimum of three days if lawmakers hope to get bills passed through both chambers, is property tax relief.

JJ Ament, president of the Denver Metro Chamber of Commerce, said the special session shouldn’t be a repeat of the legislating that ended up with the final version of Senate Bill 303, which led to Proposition HH.

Ament stood alongside the governor last May when Polis announced a plan to deal with skyrocketing property values and the higher property taxes expected to follow. 

But Ament pointed out on Tuesday that, eventually, the chamber’s board rejected the proposal, although not enough to actively oppose it nor spend money on the opposition.

He noted that chamber favored “some kind of adjustment to assessment rates,” the part the state could control, Ament said. He also noted that they supported the repeal of the 1982 Gallagher amendment, which voters approved in 2020, with the expectation that lawmakers would have at least two years to come up with a replacement.

That didn’t happen.

“Removing Gallagher with a legislative replacement, combined with the massive increase in assessed values statewide, was the worst of both worlds,” Ament said.

What cost Democrats the Chamber’s support on Proposition HH were the “ornaments” put on the tree at the last minute, Ament said. The final bill reflected a bad process by the Colorado General Assembly, he said.

Democrats included adjustments to the TABOR formula and threw in $20 million as relief for renters because their TABOR refunds would be taken to pay for the property tax relief, according to Ament. 

“They didn’t have time to think through this in an equitable way,” he said, adding the legislature could have done property tax relief without a referendum.

For his members, Ament said Gallagher, which set assessment rates for residential and commercial properties, shifted the burden from residential to small businesses that own commercial property. By 2020, small businesses had tax burdens that were four times that of the residential taxes. Add to that the “increased regulatory burden placed on business, and the state’s ranking on business friendliness has collapsed,” he added. (One survey said Colorado’s grade on small business friendliness went from an A in 2013 to a D in 2021 and a C- in 2022.)

Gallagher also hammered rural Colorado, Ament said, demolishing the economies of rural communities. 

What the chamber favors for the special session, Ament said, is “straightforward property tax relief for residents and small business.”

“We need a simple solution,” he said, adding he worries that Democratic lawmakers aren’t hearing that message.

Democratic proposals so far intend to engineer tax policy with “winners and losers” and that introduces complications the chamber opposes, Ament said.

“When you start engineering, choosing winners and losers, that’s dis-favorable policy that is anticompetitive for Colorado,” he said, it makes the state less attractive to future capital investment and employment.

Tony Gagliardi, Colorado state director for the National Federation of Independent Businesses, said he favors the solutions emerging from Republican legislators, who are proposing a change in the assessment rate for certain properties and setting up a property tax task force in 2024. But he is also hearing Democrats won’t go for the GOP’s plans.

His membership stands firm on not using TABOR refunds for property tax relief, based on a survey taken during the session, Gagliardi said, noting the legislature can adjust assessment rates and local governments can adjust mill levies – something Douglas County already did, for example.

“This should have been taken care of” after voters approved the repeal of Gallagher,” Gagliardi said. The legislature failed to act, and “now we’re suffering the consequences.”

The Colorado Association of Realtors opposed Proposition HH, largely for the same reasons cited by other business groups, including using TABOR refunds to pay for property tax relief. But the association also took issue with reclassifying property types – another facet of Proposition HH -and the association said this week it hopes not to see that again.

The ballot measure created two new subclasses of property types: owner-occupied primary residences and qualified-senior primary residences, which would have required property owners to apply for those subclasses with their local county assessors.

Brian Tanner, the association’s vice president of public policy, told Colorado Politics the group applauds the governor and lawmakers for trying to address the issues around property taxes and the impact on homeownership and accessibility.

The association is “eager to see our state leaders focus on meaningful property tax relief and solutions that do not redefine or reclassify property types,” Tanner said. 

Furman, the state chamber president, echoed that sentiment: “Somebody needs to be the adult in the room and convene both sides to come to an agreement.”