Colorado property tax cut that isn’t what it appears to be


Here’s how it typically works: Once a proposed measure qualifies for ballots, campaigns have a few months to present their cases and voters decide. If the measure is approved, the state prepares to enact the resulting legislative changes.

Pretty simple, right? Not in the case of Proposition 120 in the November 2 ballot.

What is Proposition 120?

Formerly known as Initiative 27, the ballot measure is backed by the conservative nonprofit Colorado Rising State Action, which has successfully fought for several recent policies to limit government spending in the State, such as capping new government fees and reducing state income tax.

Proposition 120 is in a similar vein, seeking to reduce property tax rates on homes and businesses for a combined average annual saving of $ 1 billion to taxpayers. The measure would reduce the residential property tax assessment rate from 7.15% to 6.5% and the non-residential property tax assessment rate from 29% to 26.4%.

Here’s where things get tricky

A coalition of Colorado lawmakers – mostly Democrats but with several GOP supporters – saw this billion dollar tax cut coming and wanted to stop it. So, in the closing hours of this year’s legislative session, they took the unusual step of passing a bill to thwart Proposition 120.

SB21-293 provides for a two-year cut that will reduce total property tax collections by approximately $ 200 million per year and allow some property taxpayers to defer part of their payments.

Importantly, it also rewrites state property tax laws to divide commercial and residential assessment categories into smaller sub-categories. On June 23, the day Governor Jared Polis enacted the bill, the ballot measure applied to the state’s obsolete law. And that was the point: the bill passed by lawmakers effectively wiped out nearly 90% of the savings promised by the ballot measure.

By the time SB21-293 kicked off, it was too late for Colorado Rising State Action to update its measurement by adjusting the language. Getting approval to circulate petitions can take months – collecting signatures can then also take months – and they should have started all over again.

Why oppose Proposition 120?

Lawmakers opposed this proposal because cutting property taxes permanently and at such a high rate would have profound impacts on local government operations, from schools to parks to police departments. It is also the likely basis for opposition campaigns this fall.

Here’s how Republican State Senator Bob Rankin put it in an interview with The Post earlier this year: “Do we really want to cut the budget for fire districts? I mean really. This is what will happen.

He argued that the legislature had an ethical duty to intervene.

Why support Proposition 120?

On the one hand, it hasn’t been fully neutralized by lawmakers: under updated state law, it still provides a tax cut for multi-family residential properties and commercial accommodation properties. .

It is also possible that the measure will be adopted as originally intended. Michael Fields, the director of Colorado Rising State Action, has vowed that if voters approve, he will sue under the argument that competing policies – SB21-293 and Proposition 120 – the most recently approved should be Implementation.

“It’s going to be a battle we win,” said Fields. “One hundred percent, we will sue if this passes. “

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