Polis signs property tax deal into law, measures removed from ballot

DENVER (KDVR) — The governor on Wednesday officially signed into law the property tax agreement designed to keep two initiatives off this year’s Colorado ballot. Now that the deal is done, FOX31 is taking a closer look at the impact it could have on your wallet.

Property owners should still expect high property taxes this year, but state leaders say the increase will be lower than if the compromise had not been passed and if ballot initiatives 50 and 108 failed. If 50 and 108 passed without lawmakers reconvening for a special session, there could have been devastating impacts on funding for local services.

Lawmakers celebrated the end of what they called property tax wars with groups that often bring property tax measures, but some concerns around the effects still exist. The deal builds on the Senate bill designed to reduce property taxes that passed earlier this year.

It reduces the residential property tax rate to around 6.4% and caps local government revenue growth to 5.25% and 6% for school districts. As a part of the deal, ballot initiative supporters removed initiatives 50 and 108 from this year’s ballot, and they have agreed not to bring any more property tax-related measures for six years.

While lawmakers are celebrating, they acknowledge folks with higher-valued homes will be getting bigger tax cuts, saying equity is a concern when it comes to property tax cuts.

“I don’t think every bill is supposed to help everybody,” Gov. Jared Polis said when FOX31 asked about homeowners with higher-valued properties eventually getting bigger cuts through the agreement than owners of lower-valued homes. “Of course, everybody benefits from property taxes being lower as well. But of course, people with higher-priced homes pay more property taxes, of course. I would also add that property taxes have gone up because valuations have gone up, different amounts in different parts of the state. That’s one of the reasons why this was so complicated.”

‘It’s a housing affordability issue’

Data from the governor’s office shows the median home price in Denver is around $709,000 with homeowners saving about $233 in property taxes next year. Down in Pueblo, where the median home price is around $326,000, homeowners are expected to save around $173 in property taxes next year.

Experts say the state is working on a bit of a balancing act.

“The state has done, the city has done certain things to work with the community to solve this issue of housing affordability. It’s a housing affordability issue,” said Vivek Sah, a professor at the University of Denver’s School of Real Estate and Construction Management.

Sah said Colorado is currently dealing with growing pains other cities have seen, with wealthy people moving in and changing the landscape for longtime Coloradans and others who moved here to work everyday jobs.

“It’s not just the [home] values. If [property taxes are] impacting a larger population, and again I think there is that correlation, that because Denver and Colorado in general have seen such high price appreciation but also have seen a lot of people move here that earn high income. So naturally, that’s happening,” Sah said.

He said more programs to bolster affordable housing components could help with the inequities. Polis said the state has done work in other areas to boost equity.

“I think the biggest work that the legislature has done around direct transfers for equity have been around the child tax credit and earned income tax credit. Those are substantially directing resources to low- and middle-income parents who have expenses with their kids,” Polis said.

Property tax commission to focus on equity

Bill sponsors said the property tax commission will continue to look into how to improve equity in future sessions.

“I want to emphasize that we did put a charge to the property tax commission in this bill to continue to look at equity in the process,” House Speaker Julie McCluskie said. “It was clear in our chamber, in our caucus, that those conversations need to continue. So even though there were pieces of legislation that weren’t successful through the special session, I trust the property tax commission to continue the conversation and make sure we are supporting lower-income Coloradans through the process.”

State Sen. Chris Hansen chairs the property tax commission.

“The speaker is absolutely right — it’s in the legislation that we just signed, and the property tax commission will continue that work from previous discussions we had earlier in the year,” Hansen said. “I would also add that Senate Bill 233 has the most progressive property tax element in the history of the state in it, which is 10% off the first $700,000 worth of property valued. That was particularly important for low- to middle-income families in the metro area, where prices have spiked.”

For now, they are celebrating initiatives 50 and 108 being removed from the ballot, with a deal of no more initiatives like them being brought for six years as long as both sides uphold the provisions of the agreement.

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