Four of the seven bills passed by lawmakers during an emergency session aimed at softening property tax increases and providing other forms of relief to residents were signed into law Monday evening by Gov. Jared Polis, just hours after the legislature adjourned.
The measures approved since Friday, in a session called after voters rejected Proposition HH this month, will affect nearly all Coloradans who are grappling with surging property taxes and a fast-rising cost of living. The owner of a typical $500,000 home will still see a significantly higher property tax bill early next year, but it will go up roughly half as much under the first measure signed by Polis.
Income taxpayers will see a flat refund of about $800 under another new law, which follows the flat-refund model used last year for rebates mandated by the Taxpayer’s Bill of Rights instead of a tiered system that provides more to higher income earners.
As many as 400,000 lower-income workers who qualify for the federal Earned Income Tax Credit will receive double the state’s usual 25% match on their state returns early next year in another law signed by Polis.
And a rental assistance program that was funded with $35 million of federal money this year would receive another $30 million infusion to keep more renters from being evicted during the first half of 2024. The new money is slightly more than the city of Denver has committed to spending on a similar program next year.
Colorado may be known for having lower property taxes compared to most states, but historic increases in property values that will drive up tax bills prompted lawmakers to act.
“After the people of our state rejected both the Gallagher and the Prop HH amendments, we have a real-life situation where across the state, assessment went up by about 40%,” Polis said during Monday’s bill-signing ceremony in his office. “Most Coloradans’ income didn’t go up by that level. And we need to cut property taxes now.”
The property tax relief law will reduce spring bills by increasing the residential deduction from property values from $15,000 to $55,000, and then temporarily reducing the assessment rate that determines how much of that value is taxed. The impact depends on the home’s value and the mill levies set where the owner lives.
The Democratic lawmakers also put the focus on more than property owners, with different kinds of aid aimed at helping renters and lower-income households — policies driven by progressive members.
Colorado lawmakers passed seven bills during the four-day special session dominated by the majority Democrats, who rejected bills sponsored by Republicans.
The Democratic priority bills passed almost entirely on party-line votes, with Republicans criticizing the scope of the package as well as the decision to draw $185 million from the state’s $3.5 billion surplus to pay for the EITC matches, reducing TABOR refunds slightly for some Coloradans. GOP members also argued the legislature should have delivered even more property tax relief by drawing on the state’s reserves and reworking previous bills that used TABOR refunds for relief.
Ultimately, the Democratic lawmakers’ plan bore a resemblance to the strategy behind Proposition HH, though it applies only for the coming year, shedding long-term changes in HH that needed voters’ approval. Polis and other top Democrats championed HH, but voters rejected it by nearly 19 percentage points in the Nov. 7 election.
Senate GOP Minority Leader Paul Lundeen said during a news conference after the legislature’s adjournment that Democrats “failed to provide the honest property tax relief that we called for” and “failed to expand the protections of the Taxpayer Bill of Rights refund dollars … (that) we also called for in our proposals.”
Meanwhile, Democrats called their economic package a meaningful one that will provide relief to Coloradans by drawing on about $200 million in general-fund dollars that were previously set aside for relief to offset reductions in property tax revenue for school districts and other local governments, at least in part.
“There are a variety of different policies that came forward to address the high cost of living in Colorado and a real attempt to recognize that that looks different for people in different parts of the state — whether they be owners or renters, whether they be in areas where there’s high growth versus low growth,” said Rep. Chris deGruy Kennedy, a Lakewood Democrat.
The four bills signed by Polis so far are led by the Democrats’ marquee property tax relief legislation, along with an appropriation of money to the state Department of Treasury to staff the property tax deferral program, the increase in the EITC match and the flattened TABOR refunds. Sponsors of the last bill pointed out that most taxpayers will receive a larger refund than they would have under the normal six-tiered, income-based setup.
Other bills remain to be signed in coming days: one creating the Colorado Commission on Property Taxes to provide recommendations to lawmakers for a more sustainable and permanent property tax structure; the bill that would expand the emergency rental assistance program, providing the money to nonprofit organizations to distribute to landlords to help tenants who face potential eviction because they can’t pay rent; and a bill enabling the state to take part in a federal summer meal program for children in low-income families.
While lawmakers and Polis celebrated Monday, tensions boiled over in the final hours of the session during the House’s discussions of the summer food program late Sunday night and Monday. Rep. Elisabeth Epps, a Denver Democrat, unsuccessfully floated an amendment that would have restricted any purchase of food from the occupied Palestinian territories tied to Israel’s latest military campaign.
Rep. Elisabeth Epps, center, speaks her mind to Rep. Chris deGruy Kennedy after leaving the floor to join supporters in the House gallery during a special session of the General Assembly at the Colorado Capitol on Monday, Nov. 20, 2023. (Photo by AAron Ontiveroz/The Denver Post)
Her request was denied, but her commentary that ended with “Free Palestine” led to an uproar from Republicans. Rep. Ron Weinberg of Loveland, who is Jewish, gave his own speech in response. The House went into recess more than once during his remarks as Epps yelled from the House gallery, where she was sitting with other pro-Palestinian supporters, that he was “out of order.”
After that hiatus, lawmakers returned to voting on the remainder of their bills before concluding the special session on property tax relief.
Polis said during the bills signing that long-term solutions are needed to keep property taxes low and ensure that schools are fully funded.
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“There’s one more chapter in this saga,” he added, “and that’s on all of our local taxing districts. I encourage all of them — now that they know what the legislature has done — to really take a serious look at floating their mill levies down, depending on the situation with the property taxes in their area, to help make living in your area more affordable.”
Senate President Steve Feinberg, a Boulder Democrat, pointed to more work ahead beyond the single-year solutions approved in the session.
“We need something more sustainable — something to replace the previous laws that governed us for decades when it comes to property taxes,” he said. “And I surely hope that we can come together on a bipartisan approach to what that should look like in the future.”
Staff writer Bruce Finley contributed to this story.