Colorado lawmakers give preliminary okay to property tax bills in Sunday session

Colorado legislators advanced two proposals tied to providing property tax relief on the final Sunday of this year's legislative session.

The House gave preliminary approval to a bill to set aside a portion of TABOR refunds for property tax relief, as well as a last-minute measure that would equalize the refund amount each Coloradan would get.   

Senate Bill 303 would ask voters this November for permission to raise what's called the Referendum C cap by 1% and keep that additional revenue for a 10-year period. That would generate about $167 million per year, which in turn would be funneled to local governments to hold them harmless from reductions in property tax revenue. 

Approved by voters in 2005, the Ref C cap allowed the state to retain and spend all revenue collected between FY 2005-06 and FY 2009-10. Afterwards, it permits the state to retain and spend all revenue collected up to the cap, which grows annually by inflation plus population growth. Surplus revenue in excess of the cap is refunded to Colorado taxpayers. 

Property taxes are skyrocketing, due in part to the voter-backed repeal of the Gallagher Amendment in 2020 and rising home values, with some counties reporting increases of 50%, raising worries many, particularly older Coloradans on fixed income, would get priced out of their homes. 

As introduced, SB 303 offered no provisions for holding harmless renters, who make about 40% of Coloradans, leading to sharp criticism the Democrat-backed property tax plan effectively takes money away from renters — on average by about $46 per taxpayer — and give that money to homeowners and commercial property owners. 

The bill won a preliminary vote of approval in the House after Democrats limited debate to three hours. That didn't include the time it took read the 60-page bill at length, which added more than two hours to the debate.

The measure is awaiting a final vote in the House and then heads back to the Senate for approval of House amendments.

The House also passed House Bill 1311, which equalizes TABOR refunds that taxpayers would get through next year's April tax filing. Under the measure, all taxpayers would get the same amount, regardless of income level, at $661 per person or $1,322 for joint filers, a one-time change from the current system that bases the TABOR refund on income levels. 

But the bill, a last-minute proposal, would not take effect if voters do not approve what will be known as Proposition HH this November. Proposition HH seeks voters permission to implement the provisions of SB 303, the other property tax bill. 

Total cost of the refunds under HB 1311, according to a fiscal analysis, is $2.37 billion. 

The bill was rushed into the General Assembly midday Saturday before the public was given a chance to review its provisions. No one testified against at the House Appropriations Committee, since it wasn't available online until halfway through hearing.  

That lack of process has been a major sticking point for Republican lawmakers, several of whom called for a special session to deal with the property tax issue.

HB 1311 won a party-line 44 to 17 vote on Sunday and won preliminary approval from the Senate late Sunday night.

In a statement, co-sponsor Rep. Mike Weissman, D-Aurora, said a flat TABOR refund would "(help) all Coloradans participate in and benefit from our state’s booming economy."

"This comprehensive property tax proposal works to support our renters and property owners alike, while protecting critical community services like water districts, fire districts, libraries and K-12 education that we all rely on,” he said. 

"A more equitable refund makes our whole state economically stronger," added co-sponsor Rep. Chris deGruy Kennedy, D-Lakewood.

Republicans criticized the majority for pushing the bill forward this late in the session, notably for introducing and tackling it on a weekend and with only three days to go before the session ends.   

House Minority Leader Mike Lynch, R-Wellington, lamented that Democrats gave lawmakers less than 24 hours to review and tackle a massive refund change with a $2.4 billion price tag. 

“If the governor truly believed in his Property Tax scheme, he and the Democrats in the legislature should want it fully heard by Coloradans, not rushed at 8 o’clock on Saturday night or voted on quickly while they attend church on a Sunday morning," Lynch said in a news release.  

"This massive change to make TABOR refunds ‘equitable’ was posted online, heard in appropriations committee, had limited public comment, and was voted on in less than a day from introduction,” he said. 

“We’ve seen this movie before," Lynch added. "Governor Polis and his friends in the Democrat controlled legislature have looked to raid TABOR to solve economic problems they’ve usually created."

In the House debate on Sunday, Republicans offered 19 amendments to SB 303, all which failed. 

A few Democratic amendments passed, including a provision to transfer about $20 million into a housing development grant fund "to be used to reduce the amount of property taxes ... paid as a portion of a tenant's rent." As introduced, SB 303 allows for any monies left over once local governments' revenue are made whole to transfer it to the state education fund. 

Another amendment, which came out of the House Appropriations Committee on Saturday, requires the state property tax administrator to convene a group of assessors and elected county officials to come up with recommendations on how to improve the designation of a primary residence, should Proposition HH receive voter approval. That report is due on Jan. 1, 2024, but, if Prop HH does not pass in the November 7 election, a little over six weeks prior, the report is not required.

When HB 1311 was heard by the Senate Appropriations Committee on Sunday afternoon, the only person who testified against it was Sandra Hagen Solin, who represents the Northern Colorado Legislative Alliance, which includes the chambers of commerce for Fort Collins, Loveland and Greeley.

"These conversations are far too important" to have in the last 36 hours of the session, she said, echoing the call for a special session. "We are very concerned that I am the only one expressing concerns on a matter of such significance." 

The only witness in favor was the Colorado Fiscal Institute's Caroline Nutter, who appears to have had advanced knowledge of the bill. In a period of economic recovery, she said, "we believe TABOR rebates should be directed as progressively as possible."