Title Board meeting April 30, 2021

The Title Board reconsidered its ballot titles for three property tax reduction proposals at its April 30, 2021 meeting.

Opponents were unsuccessful at derailing three ballot initiatives that would cost local governments more than $1 billion in property tax revenue as the Title Board on Friday stuck by its original decision to award a ballot title to the measures.

On April 21, the three-member board concluded Initiatives #26-28 contained a single subject, as the state constitution requires, and consequently set a title that would appear before voters. But objectors Carol Hedges and Scott Wasserman challenged the board's finding, trigging a rehearing at the Title Board's final meeting to screen proposals for the 2021 statewide ballot.

As introduced, the initiatives would all reduce the residential property tax assessment rate from 7.15% to 6.5% and cut the assessment rate for all other property from 29% to 26.4%. Nonpartisan fiscal analysts estimated the tax cut would constitute a $1.03 billion hit to local governments, affecting services such as K-12 education and police. Because Colorado's school financing scheme requires the state to backfill funding for local districts, there would be an extra $258 million in additional state spending each year.

Partially offsetting the sizeable loss in local government revenue would be $25 million that the state could temporarily direct toward localities — if excess income exists that normally would be refunded under the Taxpayer Bill of Rights. The three proposed initiatives would funnel the money toward fire protection, toward reimbursements for the senior homestead tax exemption, toward general relief.

Because of the large overlap between the initiatives, proponents must choose one variant to take the ballot.

Hedges, who leads the Colorado Fiscal Institute, and Wasserman, who is president of the Bell Policy Center, argued the spending offset constituted a second subject separate from decreasing tax rates, and that "offset" was not even the appropriate term to describe the hypothetical $25 million in the wake of the dramatic revenue loss.

“This is anything but an offset. It’s just not an offset," said Edward T. Ramey, an attorney representing the objectors. He also expressed confusion about localities' eligibility for the $25 million expenditure under the text of the measures.

The designated representatives for the initiatives, Suzanne Taheri and Michael Fields, argued that not only were their measures clear, but the offset provision would indeed give back what the rest of the proposal seeks to take away.

“If you look at what this cut would do to fire districts, it’s projected to be $40 million to $60 million dollars," said Fields, and "$25 million is a big chunk of that."

"This issue isn’t about fairness, and the proponents don’t have to negotiate [the level at which] we put our offset," Taheri said.

She similarly rejected the notion that the proponents were committing "logrolling," which is the improper combination of two unrelated subjects in a single initiative so that supporters of each would be motivated to vote for the package. Taheri and Fields advocated for changing the ballot titles to emphasize that cutting taxes was the subject of the measures, rather than shrinking revenues.

"This whole discussion has pointed out why the title needs to be reset because if the title talked about taxes instead of government revenue, we wouldn’t have to have this discussion," Taheri said.

While the Title Board is charged with informing voters about the implications of a yes vote on a ballot initiative, they do not consider all of the potential effects of the proposal. Consequently, two board members dismissed pleas to address the changes in state spending for K-12 education, saying they believed the measures adhered to a single subject.

Board Chair Theresa Conley, representing Secretary of State Jena Griswold, admitted she had concerns about the relationship of the $25 million diversion to the subject of cutting property taxes.

“It seems to be trying to massage the tax cut by saying there’s an offset that feels temporary and unclear," she said.

Nonetheless, the board voted to reject the challenge to the initiatives. Members did elect to tweak the title slightly, honoring the request of Fields and Taheri to indicate in the ballot title that cutting taxes was the purpose of the measures.

Absent an appeal to the state Supreme Court, the proponents will be on the path to begin collecting signatures for ballot placement. Earlier this year, the Title Board set a ballot title for a similar proposal that would cut property tax rates, reduce revenue by $1.2 billion and not include an offset.

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