Colorado Republicans lately have been unable to win statewide elections. But fiscally conservative ballot measures continue to perform well, which is why most at the state Capitol expect a proposed 9% property tax cut will pass if it qualifies for the 2021 ballot.
Rather than wait around to see how Initiative 27 would affect local government budgets in rural areas that are heavily reliant on property taxes, lawmakers have hatched a bipartisan plan to dull what they see as the assured harm of the proposed ballot measure, which is backed by the conservative group Colorado Rising Action.
Legislators introduced and intend to pass SB21-293 in these waning days of the legislative session. The bill would for two years temporarily lower property tax rates for apartment and single-family homes, as well as for agriculture and renewable energy properties at a savings to the affected taxpayers of about $200 million. The bill also allows property owners could to delay payment of up to $10,000 their property tax bills until they sell their homes.
Crucially, the bill would rewrite state law such that Initiative 27, if passed, would not have the effect its language promises.
While the sponsors are from both parties — Republican Sen. Bob Rankin, Democratic Sen. Chris Hansen and Democratic House Majority Leader Daneya Esgar — the bill supporters are primarily Democrats. Hansen said he’s motivated in part by the fact that property values are skyrocketing across much of the state.
“What we’ve done in 293 is we’ve really targeted property tax relief for the people who need it the most,” said Hansen.
While the tax relief to multifamily-building owners doesn’t directly benefit tenants, Hansen said he is banking on landlords passing their savings on by lowering or at least maintaining rent levels after they receive tax cuts.
The alternative to passing this bill, supporters believe, is to sit idly and watch to see if voters pass Initiative 27 in November. That ballot measure would bring a total savings of about $1 billion annually to property taxpayers.
Rankin was frank that the bill is “in part, a reaction to Initiative 27’s potential,” adding that lawmakers have “a responsibility to respond to these kinds of outside influences if, in fact, they would be injurious.
“Look, I’m a conservative,” he added. “I’d totally like to cut taxes, but I’d like to do it in a reasonable way.”
Rankin is concerned the proposed ballot measure will disproportionately affect rural districts and places that aren’t seeing soaring home values like the major metro areas around Colorado. He spoke on the Senate floor Friday of small fire departments selling off fire trucks to stay in the black.
“Do we really want to cut the budget for fire districts? I mean really, that’s what will happen,” said Rankin, whose northwest Colorado district includes wealthy places like his hometown of Carbondale and struggling ones like coal-reliant Craig. “Because the property values in many of these small districts will not go up.”
Michael Fields, executive director of Colorado Rising Action, said he sees the bill as an attempt to “kneecap” Initiative 27 and mislead voters. His ballot measure needs about 125,000 signatures by Aug. 2 to qualify for the ballot, and it’s too late to start over with new language that responds to SB21-293.
“If you promise voters a billion-dollar tax cut and you only give them $200 million for two years, it undermines trust in government,” he said. “I think that people should vote on exactly what the outcome will be.”
Even the Colorado Fiscal Institute, a progressive policy shop that is nearly fully opposed to Fields in ideology, shares that concern.
“Voters are the tax policy deduction makers and they are going to be voting on something that won’t actually do what it says it does,” CFI spokesman Elliot Goldbaum said. He also criticized SB21-293 for helping property owners, not lower-income people that he said “should be getting tax breaks right now.”
One of the senators who opposes the bill, Republican Sen. Barbara Kirkmeyer of Brighton, called SB21-293 “unethical.”
“We’re at the 11th hour,” she said. “It feels like we are pulling the rug out from the people with their right to do an initiative.”
Hansen was not pleased by her framing, saying: “I consider myself an ethical person and an ethical legislator and we are bringing legislation to address an immediate problem: … the rapidly changing and rapidly appreciating property market. We need to act on that this session.”
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