Over $1.5 billion in revenue reductions are on the Title Board's agenda for Wednesday, as proponents seek a ballot title on their proposed initiatives that would, if successful, cut property and income tax rates.
The three-member Title Board's primary responsibility is to determine if a given ballot measure adheres to a single subject. If so, it sets a title to appear before voters without considering the merits of the proposal itself.
Although the board previously awarded a ballot title this year to a measure that would reduce the residential and non-residential property tax rates, designated representatives Michael Fields and Suzanne Taheri have brought forward three additional variations on the concept. Initiatives #26-28 would all cut the non-residential property tax assessment rate from 29% to 26.4% and drop the residential assessment from 7.15% to 6.5%.
A fiscal analysis indicated the revenue loss to localities would top $1 billion, which would affect police and fire protection, hospitals, transportation, schools and libraries. However, there would be a small expenditure of funds to partially offset the negative consequences.
Initiative #26 would allow the state to temporarily retain and spend $25 million to reimburse local governments for fire protection activities. Initiative #27 would direct the $25 million to backfill money lost through the homestead property tax exemption for older homeowners. Initiative #28 would allow the state to retain and spend $25 million to offset the loss in property tax dollars. There is no directive for how the state would divide that money between local jurisdictions.
The nonpartisan analysts with the Colorado Legislative Council and Office of Legislative Legal Services cautioned that the effect of the measures would be to increase the state's backfill spending for K-12 education, meaning the General Assembly would have less money to direct to other purposes.
Initiatives #30-31 would reduce the state income tax from 4.55% to either 4.5% or 4.4% beginning in tax year 2022. The proposals from designated representatives Jerry Sonnenberg, a Republican state senator from Sterling, and Jon Caldara (who is a Colorado Politics opinion contributor) would lower state revenue by up to $530 million in the first fiscal year, and by up to $370 million the following year.
The measures come months after voters approved another income tax reduction, from 4.63% to 4.55%, in the 2020 general election. Sonnenberg and Caldara were also the proponents of that change.
Finally, the board will consider Initiative #32 from Caldara and John Cooke, a Republican state senator from Greeley. It would divert approximately $100 million annually from the state's general fund to the Highway Users Tax Fund, which draws revenue from gas taxes and vehicle registration fees. The reallocation would include money gained from repealing ahead of schedule the tax credit for purchasers of electric, plug-in hybrid and alternative-fuel vehicles.
In return, $22 million would go counties and $18 million would go to municipalities to fund transportation projects. The State Highway Fund would gain $60 million.
The proponents of Initiatives #23-24 have also asked the Title Board to reevaluate its previous decision about the two proposals, both of which would broadly revamp the state's direct democracy process. John Ebel and Donald L. "Chip" Creager III believed the board should not have deemed applicable the 55% vote threshold to pass state constitutional amendments. The initiatives, which are virtually identical, would add repeal language applying to several constitutional provisions.