Rising values spur Colorado property tax proposal
2 min read
Colorado lawmakers wrapped up their legislative session this week with the last-minute passage of a plan to ease a big tax hit for property owners due to rising assessed values, with the state stepping in to replace some revenue lost by local governments and schools.
Gov. Jared Polis and members of the Democrat-controlled legislature last week proposed legislation to place a measure on the November ballot for a long-term plan to prevent growing home values from raising property taxes, while creating limits that protect homeowners and businesses from steep unexpected property tax increases.
“Coloradans are facing large increases in property taxes, which is why we’re bringing this legislation to help Colorado homeowners, businesses, and renters from rising costs,” Democratic State Rep. Chris deGruy Kennedy said in a statement following the bill’s final passage Monday. “We carefully crafted this bill to reduce property taxes without cutting the essential community services that they fund.”
The bill, which is awaiting Polis’ signature, would cost the state nearly $118 million in fiscal 2024, rising to $439.7 million in fiscal 2025 if approved by voters, according to a Colorado Legislative Council fiscal note.
The ballot measure would allow the state to retain and spend revenue in excess of its current cap, make temporary assessment rate reductions for residential property, incrementally reduce the assessment rate for commercial property, and create a limit for local property taxes that excludes school districts and home-rule cities and counties, the fiscal note said.
Reduced values would not impact certain revenue collections.
“These include metropolitan district and school district bond indebtedness mills, which are typically structured to generate a certain amount of revenue regardless of the tax base,” the fiscal note said.
Colorado property owners became fearful of future property tax bills amid big rises in assessed value. Assessors in the nine-county metropolitan Denver area last month announced residential property values increased by 35% to 45%.
“This represented a significant heating up of the real estate market as of June 30, 2022, compared to prior valuation cycles,” they said in a statement.
