Chase Woodruff

(Colorado Newsline) Months after Colorado lawmakers cut property tax rates in response to a sharp rise in home values across the state, two deep-pocketed conservative groups are joining forces behind a 2024 ballot measure that aims to slash rates further and put a cap on future increases.

In an announcement Monday, Colorado Concern, an influential business group governed by a board of Colorado-based corporate executives and wealthy Republican donors, said it would back a property tax measure closely resembling the one first proposed last year by Advance Colorado, a so-called “dark money” nonprofit that has spent millions in recent years to influence state elections but is not required to disclose its donors.

The measure would slash the residential assessment rate, a statewide figure used to calculate property taxes in different local jurisdictions, from 7.15% to 5.7%. For commercial and industrial property, the assessment rate would fall from 29% to 25.5%. The measure would also limit future increases in property tax revenue to less than 4% annually, requiring local governments to seek voter approval in order to retain any revenue in excess of that limit.

The result would be billions of dollars in lost revenue for local taxing districts, including cities, counties and school, fire and water districts. Three different versions of the ballot measure, introduced jointly last week by Colorado Concern CEO Dave Davia and Advance Colorado president Michael Fields, propose slight variations on a mechanism that would require the state to reimburse local districts using the state’s general fund, at a cost of around $750 million annually.

“The objective is balance — our teachers and firefighters need and deserve significant financial support, but the truth is we can do that without increasing property taxes on a local business or a homeowner by 30-40%,” Davia said in a press release.

Regressive taxes

At 0.55%, Colorado’s effective property tax rates are the third-lowest of any state in the nation, according to data from the conservative-leaning Tax Foundation.

Data from Colorado and other states show that lower revenues from property taxes and income taxes, which Colorado conservatives have also led successful efforts to slash in recent years, cause state and local governments to rely more heavily on sales taxes and fees to fund services — a so-called regressive tax structure, with low- and middle-income people paying higher overall tax rates than the rich.

Beginning last year, as increases in home values averaged 30% to 40% in many Colorado cities during the previous two-year assessment cycle, a series of efforts by Colorado lawmakers in both parties aimed to provide homeowners relief. Proposition HH, referred to the 2023 ballot by the Legislature and backed by a coalition including Democratic Gov. Jared Polis and Colorado Concern, would have cut assessment rates but offset the lost revenue with money that otherwise would have been refunded with the annual refunds mandated by the Taxpayer’s Bill of Rights.

Voters rejected Proposition HH by a wide margin. Days later, Polis called a special session of the Legislature, during which Democrats passed a scaled-down package of roughly $430 million in property tax relief for 2023 and created a 19-member commission tasked with proposing a “permanent and sustainable property tax structure for the state.” The task force’s recommendations are due by March 15.

But Davia said that Colorado Concern and Advance Colorado will “build a broad-based campaign” to end what a press release from the two groups called a “crisis of exploding property taxes.” Their proposed ballot measure could be heard and approved for signature-gathering by the state Title Board as soon as Feb. 21.

“We fully expect the voters of Colorado to resoundingly support the plan in November,” he said.