More property tax cuts will be up for discussion at Colorado special session

Colorado's lawmakers will hold a special session later this month to again address rising property taxes.

Gov. Jared Polis called for the special session on Thursday, saying a compromise would provide more property tax relief to homeowners and head off two ballot issues that would have "risky and devastating impacts."

The session will begin on Monday, Aug. 26.

In a news release, Polis' office said an "agreed upon framework" would reduce assessment rates for the third time in as many years and adjust local and school district caps. The governor's office says the proposal will save taxpayers $270 million more in property taxes in 2025 and more in future years.

But the agreement requires the proponents of two property tax measures on the November ballot to withdraw them and agree "there will be no similar ballot measures in the future," the news release said. Polis said he won't sign any legislation from the special session until the measures have been pulled from the ballot.

“The cost of inaction is too high," Polis said. "We refuse to gamble with our schools, our economy, our future. Proposed ballot measures threaten to gut funding for K-12 and higher education, and Coloradans are counting on us to find a path forward that saves people money on property taxes while preserving these critical institutions.”

What are the property tax measures on the ballot now?

Proposition 108 would cut property assessment rates to 5.7% for residential property and 24% for nonresidential. Any shortages caused by the change would be backfilled by the General Fund.

Initiative 50 would create a 4% cap on property tax revenues statewide annually. Local districts could keep revenues that exceed the cap if approved by a statewide vote. It's a constitutional amendment, meaning it would be enshrined in the Colorado Constitution, so it would need 55% of the vote to pass.

Advance Colorado Institute has proposed both measures. On its website, Michael Fields said the legislature's previous efforts to address property taxes won't provide long-term relief, but a cap would.

The governor's office says the ballot measures "jeopardize funding for critical services in our state like education, as well as municipal bonds and borrowers’ ability to fund important projects like housing and schools."

How Colorado property taxes have changed

Colorado has one of the lowest property tax rates in the nation , but with home values rising at a rapid rate in the state, it has led to some sticker shock when estimating tax bills.

The last time valuations were done, in 2023, home values increased between 37% and 64% in Larimer County.

Foreseeing big property tax increases, in 2022, the legislature temporarily lowered the rate from 7.15% to 6.765%.

When a complex ballot measure to lower property rates in exchange for reducing other statewide tax refunds failed in November 2023, the governor called a special session, where legislators passed another property tax cut, along with other tax policies. They temporarily lowered the residential assessment rate from 6.765% to 7% and exempted $55,000 of a home's value from taxation, rather than $15,000.

In the 2024 legislative session, more changes to tax rates were passed for 2024 to 2026. Polis says those reduced property taxes will save families an average of $500 in 2024 and 2025 while prioritizing school funding.

This article originally appeared on Fort Collins Coloradoan: More property tax cuts will be up for discussion at Colorado special session