The recent special session of the Colorado Legislature came to a close with the approval of House Bill 1001, aimed at addressing property tax cut initiatives that were causing concern in the state’s municipal bond market. This bill, which received bipartisan support, signifies a significant step towards easing tensions surrounding property tax issues in Colorado.
Agreement with Initiative Backers
House Bill 1001 includes an agreement with the backers of Initiative 50 and 108, who agreed to remove the measures from the ballot in exchange for the state officials adhering to certain provisions outlined in the agreement. This arrangement paved the way for the bill to be passed and signed into law by Gov. Jared Polis, who highlighted the importance of ending the property tax disputes in the state.
Initiative 50, a proposed constitutional amendment aiming to cap statewide property tax revenue growth at 4%, raised concerns among Colorado bond market professionals. They expressed worries about the lack of clarity on the implementation of the measure and its potential impact on issuer borrowing costs. Additionally, there were fears of litigation, particularly against metropolitan districts that rely on property taxes for funding public infrastructure projects.
Impact of House Bill 1001
House Bill 1001 builds upon previous property tax cuts anticipated under Senate Bill 233, expanding the scope of tax reductions for school districts and local governments. With an additional $255 million in property tax cuts planned for 2025 and $295 million for 2026, the bill aims to ease the burden on small businesses and homeowners while ensuring that the state makes up for lost revenue.
The special session saw the introduction of several bills, with House Bill 1001 and HB 1003 being the only ones to receive final approval. Despite the passage of a proposed constitutional amendment for local control of property tax changes in the House, it failed to advance in the Senate committee. This left HB 1001 as the primary focus of the session, addressing crucial property tax issues in the state.
The efforts to reform property taxes in Colorado come in the wake of the repeal of the state’s Gallagher Amendment in 2020. With the aim of protecting homeowners from escalating tax bills, state lawmakers have been working to establish mechanisms that ensure fair and sustainable property tax policies in the state.
The passage of House Bill 1001 represents a significant milestone in addressing property tax concerns in Colorado. By navigating the complex issues surrounding property tax initiatives and garnering bipartisan support, the Colorado Legislature has taken a crucial step towards ensuring financial stability and affordability for homeowners and businesses in the state.