Colorado House passes flat TABOR refund rate in effort to ease huge spike in property taxes

Colorado House Democrats on Sunday issued a press release on the passage of a flat TABOR rebate rate as part of a legislative package aimed at reducing a huge spike in property tax valuations. Colorado Senate Democrats passed their own version in a committee vote as the Colorado Legislature wraps up this week.

DENVER, CO – The House today passed one part of a legislative package to reduce property taxes and create a flat TABOR refund mechanism that will increase refunds for Coloradans making under $100,000.

“A flat TABOR rebate fairly supports Coloradans making under $100,000, putting more money back into the pockets of hardworking families,” said Rep. Chris deGruy Kennedy, D-Lakewood. “With voter approval, Colorado’s TABOR refund will provide our middle and lower income neighbors their fair share. With their TABOR refunds in hand, our neighbors can finally afford that repair they’ve been putting off, pay lingering bills, and support local businesses. Simply put, a more equitable refund makes our whole state economically stronger.” 

“Colorado’s economic growth is strong, yet rising property taxes have left many families and seniors in a bind,” said Rep. Mike Weissman, D-Aurora. “Under this bill, Coloradans will receive a flat TABOR refund, which helps all Coloradans participate in and benefit from our state’s booming economy. This comprehensive property tax proposal works to support our renters and property owners alike, while protecting critical community services like water districts, fire districts, libraries and K-12 education that we all rely on.” 

HB23-1311 is contingent upon the passage of SB23-303. This legislative package lowers property taxes for homeowners and businesses, increases TABOR refunds for those making under $100,000 and protects funding for critical community services. HB23-1311 passed the House by a vote of 44 to 17. 

If Colorado voters adopt Prop HH, HB23-1311 would require the TABOR surplus for FY 2022-2023 to be refunded equally to qualifying taxpayers. Without this legislation, the FY 2022-2023 TABOR refund would be refunded by the six-tier sales tax refund mechanism, giving lower earners smaller refunds than higher earners. If voters do not approve of Prop HH in the November 2023 election, the six-tier mechanism will be applied to TABOR refunds; single filers that make under $50,000 per year would receive a TABOR refund of $454, while single filers that make over $270,000 would receive a TABOR refund of $1,434. 

Under HB23-1311, Colorado taxpayers could expect to receive a refund of $661 for single filers, and $1,322 for joint filers. This will return more money to everyone making under $100,000 than under the current six tier refund mechanism. Final refund amounts will be determined based on updated revenue statistics. Further, after accounting for the portion of refunds that will backfill property tax reductions, Coloradans who make less than $100,000 can expect to see an increase in their TABOR refund if Prop HH passes. 

This legislation creates a more equitable TABOR refund mechanism for FY 2022-2023 and supports hardworking Coloradans to better afford everyday necessities. 

SB23-303 creates a long-term solution to prevent rapidly growing home values from causing sharp rises in property taxes, and creates limits that protect homeowners and businesses from steep unexpected increases in their property taxes. 

If passed, Coloradans will vote on this package in November, and if approved these measures will provide sustainable, long-term reductions to property tax rates while delivering immediate savings on property taxes this year. Combined with property tax reductions the legislature previously enacted via SB22-238, this proposal will cut the average homeowner’s tax increase in half, saving $1,264 on average over the next two years. In total, this package would provide between $900 million and $1.6 billion annually in property tax reductions for homeowners and businesses in Colorado. 

Other property tax reductions and protections proposed in this plan include: 
· Reducing the residential assessment rate from 7.15 percent to 6.7 percent in 2023 and 2024, and continuing this reduction for primary residences. 
· Incrementally reducing the business property assessment rate from 29 percent to at least 26.9 percent by 2032. 
· Reducing the taxable value of residences by $40,000 in 2023 and 2024, and continuing this reduction for primary residences in future years. 
· Capping the growth in district property tax collections excluding school districts at inflation and allowing local governments to override the cap after giving notice to property owners. 
· Protecting funding for public education and backfilling revenue to fire districts, water districts, ambulance and hospital districts in areas of the state that aren’t growing as fast by dedicating a portion of the state TABOR surplus to backfill them. 
· Providing seniors who currently receive the Homestead Exemption a larger reduction of $140,000 and allowing them to continue to receive this reduction if they move

Here’s the release from the Colorado Senate Democrats:

DENVER, CO – The Senate Appropriations Committee today advanced one part of a legislative package to reduce property taxes and create a flat TABOR refund mechanism that will increase refunds for Coloradans making under $100,000.

If Colorado voters adopt Prop HH in November, HB23-1311 would require the TABOR surplus for FY 2022-2023 to be refunded equally to qualifying taxpayers. Colorado taxpayers could expect to receive a refund of $661 for single filers, and $1,322 for joint filers.

“We’ve worked hard to provide Coloradans immediate property tax relief through Prop HH that will save families across our state more than a billion dollars each year – but not everyone owns property, which is why we’re working to get them relief, too,” Hansen said. “This proposal will make TABOR refunds more equitable and directly benefit Coloradans by getting them bigger refunds when they’re needed most.”

“TABOR refunds should be equitable,” Hinrichsen said. “Flat TABOR refunds will ensure that hardworking Coloradans from all walks of life are supported fairly. We’re taking care of property owners through Prop HH, and this proposal will help give folks more financial freedom to fill up their tank, put food on the table, buy school supplies, and pay their bills.”

HB23-1311 is contingent upon the passage of Proposition HH, the measure referred to the voters by SB23-303. This legislative package lowers property taxes for homeowners and businesses, increases TABOR refunds for those making under $100,000, and protects funding for critical community services. Under the package, after accounting for the portion of refunds that will backfill property tax reductions, Coloradans who make less than $100,000 can expect to see an increase in their TABOR refund if Prop HH passes.

Without this legislation, the FY 2022-2023 TABOR refund would be refunded by the six-tier sales tax refund mechanism, giving lower earners smaller refunds than higher earners. If voters do not approve of Prop HH in the November 2023 election, the six-tier mechanism will be applied to TABOR refunds; single filers that make under $50,000 per year would receive a TABOR refund of $454, while single filers that make over $270,000 would receive a TABOR refund of $1,434.

SB23-303 creates a long-term solution to prevent rapidly growing home values from causing sharp rises in property taxes, and creates limits that protect homeowners and businesses from steep unexpected increases in their property taxes.

Coloradans will vote on this package in November, and if approved, the proposal will provide major long-term reductions to property tax rates while delivering immediate savings on property taxes this year. Combined with property tax reductions the legislature previously enacted via SB22-238, this proposal will cut the average homeowner’s tax increase in half, saving $1,264 on average over the next two years. In total, this package would provide between $900 million and $1.6 billion annually in property tax relief for homeowners and businesses in Colorado. 

Other property tax relief and protections proposed in this plan include: 

• Reducing the residential assessment rate from 7.15 percent to 6.7 percent in 2023 and 2024, and continuing this reduction for primary residences.
• Incrementally reducing the business property assessment rate from 29 percent to at least 26.9 percent by 2032.
• Reducing the taxable value of residences by $40,000 in 2023 and 2024, and continuing this reduction for primary residences (not second homes or investment properties) in future years.
• Capping the growth in district property tax collections excluding school districts at inflation and allowing local governments to override the cap after giving notice to property owners.
• Protecting funding for public education and backfilling revenue to fire districts, water districts, ambulance, and hospital districts in areas of the state that aren’t growing as fast by dedicating a portion of the state TABOR surplus to backfill.
• Providing seniors who currently receive the Homestead Exemption a larger reduction of $140,000 and allowing them to continue to receive this reduction if they move.

HB23-1311 will now move to consideration before the full Senate. Track the bill’s progress HERE.