Colorado Governor Jared Polis has called for a special legislative session on August 26 to address further property tax cuts. This action comes in response to proposed ballot initiatives that could have a significant negative impact on public financing, education, and local government funding in the state.
Governor Polis emphasized the importance of taking action, stating that “the cost of inaction is too high.” He expressed his commitment to not signing any legislation from the session until the proponents of Initiatives 50 and 108 remove them from the ballot. The Governor highlighted the potential threat to K-12 and higher education funding posed by these measures and stressed the need to find a solution that reduces property taxes while preserving critical institutions.
Details of the Initiatives
Initiative 50, a proposed constitutional amendment, aims to cap total statewide property tax revenue growth at 4%, requiring voter approval to lift the cap. Initiative 108, on the other hand, seeks to lower assessment rates for residential and nonresidential properties. Concerns have been raised by Colorado bond market professionals about the lack of details in Initiative 50 and the potential consequences it could have on borrowing costs and litigation.
The proposed legislation, which builds on Senate Bill 233, includes further reductions in assessment rates and adjustments to property tax revenue growth caps for local governments and school districts. This new framework is estimated to save property owners around $270 million on their 2025 tax bill. The legislation also addresses the concerns of metropolitan district issuers, protecting existing debt and excluding new developments from the growth limit.
During a meeting with the state’s Commission on Property Tax, it was revealed that Initiative proponents were willing to remove the measures from the ballot in exchange for additional tax measures. This agreement also includes a commitment to not introduce similar ballot proposals for at least 10 years. The proposed legislation, combined with SB 233, is expected to lead to approximately $1.6 billion in annual tax savings.
Despite the agreement between Governor Polis and Initiative proponents, Ann Terry, CEO of the Special District Association of Colorado, expressed skepticism about how the promise to remove the initiatives from the ballot would be enforced. She emphasized the need to protect all special districts in the state.
The efforts to address property taxes in Colorado are not new. Lawmakers have been seeking ways to control property tax increases, especially in the absence of mechanisms like the Gallagher Amendment, which was repealed by voters in 2020. The ongoing discussions and negotiations aim to strike a balance between reducing property taxes and ensuring adequate funding for public services.
The special legislative session called by Governor Polis reflects the urgency of addressing potential threats to public financing and education posed by proposed ballot initiatives. The proposed legislation, combined with agreements with Initiative proponents, offers a path forward that balances property tax cuts with the preservation of critical institutions. However, vigilance and oversight will be crucial in ensuring that the promises made are upheld and that all special districts are protected in the process.