Dwindling Days of Session Bring Potential Property Tax Relief

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This week in policy:

With the days dwindling down to the end of the legislative session, we are still seeing some major bills launch. One piece of legislation introduced just this week is Senate Bill 238, which could reshape the next few years of Colorado property taxes.

This bill was unveiled on Monday by Gov. Jared Polis and state lawmakers, and it was drafted to appease supporters of a ballot initiative that would cap property tax increases and result in $1.3 billion fewer dollars collected by local governments. The ballot measure is sponsored by Colorado Concern; however, the organization has suggested they may stop pursuing a constitutional approach as long as Senate Bill 238 doesn’t change and passes the legislature.

Our president and CEO, J. J. Ament, spoke at the bill’s press conference earlier this week. He stressed that this bill helps further economic recovery and will be a huge relief to Coloradans.

Senate Bill 238 is part of the Polis administration’s attempt to temporarily reduce the state’s assessment rates, which help determine the taxable value for residential and commercial properties. This change is meant to partially offset the sharp increases in property tax bills that are coming over the next two years as a result of our high-demand housing market.

Currently, property taxes paid by Colorado owners are expected to rise by nearly $3 billion in tax years 2023 and 2024 because of higher property values. The proposal in Senate Bill 238 slows that increase, and property taxes would rise by a lower amount to save taxpayers about $700 million.

For the 2023 tax year, the bill reduces the residential assessment rate used to calculate property taxes from 7.15% to 6.765%. Additionally, the first $15,000 in taxable value of a residential property would be waived.

For commercial properties, the assessment rate in 2023 would be reduced from 29% to 27.9%. Additionally, roughly the first $30,000 in taxable value of a commercial property would be waived.

The bill amplifies and extends temporary discounts that lawmakers approved last year, and it further lowers the rates for 2023 and maintains these low rates through 2024. Residential and commercial properties will have their assessed values temporarily reduced in tax year 2023 by a set dollar amount of $10,000 for residential and $30,000 for commercial. The overall impact of the savings would differ from place to place due to property taxes being impacted by a combination of state and local factors.

The bill also includes other changes to property tax assessment formulas.

But even with the changes, property tax bills may still rise for many owners since the reduced rates may not fully offset the increase in value in next year’s reassessment.

An additional downfall is the bill’s plan to spend $400 million to help schools and local governments withstand the reduction in property tax revenue. Half the money will be spent by the legislature this year through the general fund. The second half will also come from the general fund, but it will count toward the $1.3 billion to $1.6 billion that is projected to be owed to Coloradans from next fiscal year because of the Taxpayer’s Bill of Rights cap, likely impacting TABOR refunds.

As the cost of doing business and living in Colorado continues to increase, the Chamber supports measures that will lighten the tax burden for local businesses and property owners. However, as an organization we strongly prefer a legislative approach to this important issue, because formulas added to the Colorado constitution lack flexibility and aren’t able to adapt readily to change to change upon implementation. While the pulling of $200 million from future TABOR refunds warrants caution, we are optimistic about this bill and its ability to provide relief to Colorado’s property owners.

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Here are the bills we took a stance on this week.

  • Support
    • House Bill 1366 establishes a number of new programs for students, creates workforce coordinators in the department of education to train educators concerning financial aspects of postsecondary options, updates the financial literacy resource bank and creates stipends for teachers who complete financial aid training. This bill equips teachers and other education professionals with the tools they need to help students navigate a complex federal application process. It is essential that Colorado invest in and develop local talent. We support this bill because it works toward economic goals identified by Prosper Colorado and our various talent initiatives.
    • House Bill 1408 incentivizes a film production task force to study how performance-based film production in Colorado can become more effective. It requires any findings to be submitted to the Business Affairs and Labor committee and the Business, Labor, and Technology committee by Jan. 1, 2023. It also makes a $2 million transfer from the general fund to the Colorado office of film, television and media operational account cash fund. This bill helps direct economic development dollars into expanding and promoting the film sector. We support studying the efficacy of economic development dollars and see the value of making Colorado a cultural destination.
    • Senate Bill 226 makes several appropriations from the economic recovery and relief cash fund to bolster the healthcare workforce. It also directs the Primary Care Office and the Governor’s Office of Information Technology to establish a data-sharing agreement to analyze the need and allocation of state-administered or state-financed workforce initiatives in healthcare, removes a limitation on payment for volunteer nurses, and requires the nurse-physician advisory task force to make a series of workforce recommendations. Healthcare as an industry was uniquely burdened during the pandemic and the industry is now experiencing significant workforce attrition. Improving the workforce shortage through worker retention, higher education enrollment and developing workforce skills is a crucial way to sustain this sector, retain employees and rebuild our economy.
    • Senate Bill 234 requires the State Treasurer to transfer $600 million from federal American Rescue Plan Act (ARPA) dollars into a newly created fund that must be used to repay Colorado’s outstanding federal debt related to unemployment. This bill also makes changes to the Unemployment Insurance Trust Fund (UITF) regarding increases in partial unemployment benefits, repealing the minimum eligibility wait time and more. The ARPA dollars’ express purpose is to mitigate the impact of the pandemic on states and local communities. It is only natural that these dollars would also be used to restore Colorado’s UITF to solvency, as its depletion was incurred by pandemic related business closures. We applaud the legislature for directing such a substantive amount in to the UITF; however, we still have millions of dollars to recoup for the fund to be solvent.

    Neutral

    • Senate Bill 232 creates the Colorado workforce housing trust authority and gives this body the ability to acquire, construct, rehabilitate, own, operate and finance affordable rental workforce housing. This authority is governed by a board of directors that will solicit project proposals by Oct. 1, 2022 for units that provide workforce housing. The Chamber supports efforts to develop workforce housing and policy that incentivizes adaptation. With that said, we remain neutral on this bill because we want to give the legislation time to test a novel funding mechanism before endorsing the strategy.

    Oppose

    • House Bill 1401 requires every hospital to establish a nurse staffing committee by Sept. 1, 2022. The committee is required to implement a nurse staffing plan and to track feedback and complaints from nurses and other staff. The bill levies fines on hospitals who do not fulfill the requirements of staff-bed capacity, and have a luck of vaccine availability onside, and fail to include necessary testing capabilities at their sites. This bill worsens the already significant shortage of nurses by enforcing an unrealistic nursing staff ratio at hospitals. It encroaches on the hospitals’ ability to be adaptable and account for a variety of circumstances that might impact how they do business.
    • Senate Bill 230 grants public employees of a county to organize, form, join and/or assist to engage in collective bargaining and communicate with other county employees and organization representatives to discuss and receive literature regarding employee organization issues. This bill requires counties to honor county employee authorizations for payroll deductions, sets forth the process of determining and appropriate bargaining unit, and requires the county and the exclusive representative to collectively bargain in good faith. The Labor Peace Act is a fundamental component of Colorado labor relations, but this careful balance between labor and employers is at potential risk with this legislation. We have unique, diverse communities across our state, and a one size fits all government mandate does not work. This is a matter of local control and should be a county-by-county decision.

    Testimony

Read our justifications for these positions and more on our current legislation page.

Have questions or concerns about policy? Contact our Government Affairs team.