State House and Senate Democratic leaders on Thursday revealed their proposed solution to soaring property taxes in Colorado: Increase the value exemption for residential properties by thousands of dollars and decrease the assessment rate.  

That would result in homeowners paying less in property taxes, though how much exactly would depend on the value of the property.

The proposal notably leaves out any property tax relief for commercial, hotel, lodging, agriculture or other non-residential properties.

Colorado lawmakers will tackle the proposal during a special session that begins at 9 a.m. Friday. 

And despite the request from Gov. Jared Polis for bipartisan solutions, some of the Democratic leaders sent this message to Republicans: Their bills aren’t serious.

The governor gave lawmakers a laundry list of issues around property tax relief that he wants to see addressed in the special session. Democrats indicated on Thursday they intend to introduce separate bills on most of them.

Property tax relief

A bill from Senate President Steve Fenberg of Boulder, Sen. Chris Hansen of Denver, House Speaker Julie McCluskie of Dillon and Rep. Chris deGruy Kennedy of Lakewood will increase the property value exemption for residential property from $15,000 to $50,000 and decrease the assessment rate from 6.765% to 6.7%.

This applies to the 2023 tax year only, as reflected in the governor’s call.

To help local governments and schools, which will see a reduction in their tax revenue as a result, the bill will tap $200 million from the general fund, already available for those purposes from 2022 legislation, with $135 million going to the state education fund to ensure no loss of revenue for public schools.

Whatever is left would go to fire districts and to counties that had less than 13% growth in the past year.

A draft copy of the bill also shows the same mechanisms for multi-family residential, which means condo and townhome owners would accrue the same benefits as a the owner of a single-family home.  

Fenberg explained in a Thursday news conference the 13% number reflects communities that saw lower growth than the rate of inflation.

Here’s what else Colorado Politics has learned:

Earned Income Tax Credit 

The Earned Income Tax Credit will be increased – again, this applies to 2023 only – from 25% of the federal match to “one of the highest matches in the country” via a bill to be sponsored by Reps. Jenny Wilford and Mary Young, and Sens. Chris Kolker and Rhonda Fields.

The Democrats did not say how high that credit would be.

TABOR refunds

A bill Democrats passed earlier this year would have required “equalized” TABOR refunds, predicated on the passage of Proposition HH. Kennedy said they are bringing back that proposal, but they don’t yet have firm numbers on the amount of the refunds, since that will depend on how the other bills interact. But their goal is to give all taxpayers, regardless of income, the same refund, to be paid in 2024.

Renter assistance

House Majority Leader Monica Duran of Wheat Ridge said a bill on rental assistance will be sponsored by Reps. Leslie Herod of Denver and Mandy Lindsay of Aurora, and Sen. Julie Gonzales of Denver. She noted the state has recorded 44,000 eviction filings so far this year and that number could exceed 50,000 by year’s end. Their proposal would invest $30 million into emergency rental assistance, to be handed out by the Department of Local Affairs, which already has $35 million for those purposes.

Eligible expenditures include current and late rent, up to two months of rent in advance, utility bills, late fees, court and attorney costs or other costs that would prevent an eviction.

Republican proposals

While McCluskie pointed out she’s been in regular conversations with House Republican leadership, Fenberg said the GOP proposals are “not real.” 

He said those proposals are not responsible, since they rely on tapping the state’s reserves to pay for backfilling local government revenue. The state will need those reserves should it face another recession, he said. This would re-create the budget stabilization factor, which the governor proposes to pay off in the 2024 session.

“They have created their hard lines in the sand,” Fenberg said.

Any proposal to use reserves to pay for property tax relief is “very challenging for our caucuses,” and he doesn’t anticipate any Democrat supporting such an approach.

Other provisions

What’s not in the Democrats’ proposals is portability of senior homestead property tax exemptions, which was part of Proposition HH. 

Democrats also have a proposal for dealing with the new summer federal food and nutrition program for children that has a deadline of January 1 for the state to participate. 

As for the last part of the governor’s special session call – the creation a task force that will look at long-term property tax solutions – Democrats said that can wait until the 2024 session.