Colorado lawmakers pass property tax relief as heated special session concludes in Denver

House Majority Leader Monica Duran addresses the Colorado House of Representatives on Nov. 20, 2023. (Sara Wilson/Colorado Newsline)

The Colorado Legislature wrapped up its four-day special session focused on property taxes on Monday with some drama, ushering through a relief plan that closely resembles the core of a failed ballot measure and additional bills with targeted relief for low-income Coloradans and renters.

“The call for this special session gave us a clear directive for the past few days, but the policies we passed mark the start — not the finish line — for the progress we’ll make next session. In just a few short weeks we’ll be back at the Capitol to build on this work and continue taking bold action to improve the lives of all Coloradans,” Senate Majority Leader Robert Rodriguez, a Denver Democrat, said in a statement following the end of the session.

Democratic Gov. Jared Polis called the special session in the wake of Proposition HH’s defeat at the ballot box earlier this month. That proposition, referred to voters by lawmakers earlier this year, would have reduced property tax rates over 10 years and exempted part of a home’s value for its assessment. To pay for the cuts, the government would have been allowed to keep more tax revenue than currently allowed under the Taxpayer’s Bill of Rights, in turn reducing the amount owed back to taxpayers through annual refund mechanisms. 

The TABOR issue was central to lawmakers’ weekend debate on how to move forward to reduce the sharp increase in property taxes expected next year. Republicans contended that by rejecting Proposition HH, voters sent a message that they do not want the TABOR surplus to be used to pay for any policy, tax relief or otherwise. While the property tax plan passed by Democrats will not use TABOR surplus, another bill to expand an income tax credit will dip into the surplus money. 

On the other hand, Republicans’ plan for property tax relief relied on using general fund reserve money, which was a non-starter for Democrats as they worried that depleting reserve money would put the state in a bad spot during an economic downturn.

“At the end of the day, this is real relief done in a way that doesn’t do it on the back of our future teachers, our future students, because there will be a downturn somewhere in the future. We’ll need to use our reserves to make sure we get through those headwinds,” Senate President Steve Fenberg, a Boulder Democrat, said Monday evening.

Republicans criticized the special session at its conclusion, saying it did not provide the “honest” property tax relief and TABOR protections they called for.

“The result is tragically similar to the approach that was offered in Proposition HH, which was so soundly rejected by the voters in the recent election,” Senate Minority Leader Paul Lundeen, a Monument Republican, told reporters after the session ended.

Democrats command substantial majorities in both chambers of the Legislature.

Polis applauded the work accomplished during the special session as he signed four of the session’s seven bills Monday night, yet he emphasized that there is significant work to be done on a long-term property tax plan and lowering the cost of housing in the state overall.

“Of course, the actions we’re taking today can’t solve the real affordability crisis we have in housing. For that work, the General Assembly will return in January,” he said.

Here is what the Legislature passed, almost entirely on party lines, in addition to an appropriation to the Treasury Department to boost staffing for a tax deferral program:

Senate Bill 23B-1: Property tax relief for Colorado homeowners

The Democrats’ main bill from the session will reduce the residential assessment rate for the 2023 tax year to 6.7% from 6.765%. Additionally, homeowners will be able exempt $55,000 of their home’s value from taxation. That amounts to about $430 million in property tax relief.

“We’re talking hundreds of dollars for the average homeowner. That’s real money for a lot of people who are struggling — for people on fixed incomes, for seniors,” Fenberg said.

Those numbers are very similar to the ones from Proposition HH. Property taxes will still rise next year for homeowners, though by not as much. 

To pay for the rate cut, the bill uses $200 million in general fund money that was already set aside for this purpose. School, fire, hospital and ambulance authorities will be repaid completely for the revenue they will miss out on due to lower tax rates. After that, local governments will be partially repaid depending on how much their assessment values have grown, so areas with slower growth, under 15%, will see more money and areas with bigger growth will see less, if any.   

SB23B-1 was sponsored by Fenberg, Sen. Chris Hansen of Denver, House Speaker McCluskie of Dillon and Rep. Chris deGruy Kennedy of Lakewood, all Democrats. 

Polis signed it into law on Monday evening.

Senate Bill 23B-2: Opting into a federal food assistance program

Colorado will be part of the new federal Summer Electronic Benefits Transfer program next summer, which will provide up to $120 to children at risk of food insecurity when school is not in session. Bill sponsors estimate that about 300,000 children in Colorado will benefit.

SB23B-2 was sponsored by Sens. Rachel Zenzinger of Arvada, Sen. Jeff Bridges or Arapahoe County, Rep. Shannon Bird of Westminster and Rep. Lorena Garcia of Adams County, all Democrats.

Senate Bill 23B-3: Making TABOR refund checks equal for every taxpayer

Colorado taxpayers will all get the same amount in their TABOR refund checks next year. When the state collects tax revenue over the constitutional cap, which is adjusted annually by inflation and population growth, it must return the extra money back to taxpayers. There are a variety of refund mechanisms, including direct checks based on income level. That means higher earners who pay more in taxes generally get a larger refund check. 

Instead, all filers will get the same amount of $800. 

If Proposition HH had passed, this policy would have gone into effect, so Democrats brought it forward for the special session. 

Republicans argued that flattening the TABOR refund checks is unfair to people who pay more in taxes, while Democrats see it as a move towards equity and making sure wealthy Coloradans don’t benefit at the expense of others.

“It’s not helpful for either side to be talking about haves and have nots and who is winning and who is losing. It’s about whether it’s a win for the entire state and our entire society, and I say it is,” Rep. Bob Marshall, a Highlands Ranch Democrat, said on the House floor Monday. 

Most Coloradans will get higher refund checks, but higher earners will get lower checks.

“Those on the lowest income scale are going to see $426 extra dollars. That’s meaningful. That means more gas to get to work, food on the table, part of a rent payment. This matters,” Rep. Javier Mabrey, a Denver Democrat, said ahead of the bill signing.

SB23B-3 was sponsored by Sen. Nick Hinrichsen of Pueblo, Sen. Janice Marchman of Loveland, Mabrey and Rep. Ruby Dickson of Centennial, all Democrats.

Polis signed it into law on Monday evening.

House Bill 23B-1001: Providing $30 million more for rental assistance

The Legislature added $30 million in emergency rental assistance during the special session, bringing the total amount it has invested to $65 million. That is targeted relief for people who make up to 80% of the area median income and are at risk of eviction.

It can go towards rent, utility bills, late fees, court costs, reasonable attorney fees, and any other costs associated with eviction prevention. The grants will be administered through the Division of Housing within the Department of Local Affairs.

If the money isn’t distributed by next July, it will head back to the state to spend elsewhere.

HB23-1001 was sponsored by Rep. Leslie Herod of Denver, Rep. Mandy Lindsay of Aurora, Sen. Julie Gonzales of Denver and Sen. Janet Buckner of Aurora, all Democrats.

House Bill 23B-1002: Expanding the state’s earned income tax credit

The largest relief measure the Legislature passed that wasn’t tied to homeowners doubled the state’s earned income tax credit for this year. Right now, the state gives 25% of the federal benefit amount to those who qualify. Next year, the state amount will be 50% the federal amount. 

The earned income tax credit largely benefits low-income working families.

HB23B-1002 was sponsored by Rep. Jenny Willford of Northglen, Rep. Mary Young of Greeley, Sen. Chris Kolker of Centennial and Sen. Rhonda Fields of Aurora, all Democrats.

Polis signed it into law on Monday evening.

House Bill 23B-1003: Creating a task force for a long-term property tax plan

The Legislature formed a 19-member task force to study and develop potential long-term “permanent and sustainable” property tax plans to consider. The task force will include members of the Legislature, local elected officials, an assessor and members representing education, firefighting and business interests.

The group’s makeup was amended in the Senate to represent more political viewpoints and parts of the state.

The task force will meet twice a month until March next year and, ideally, will come up with legislation for the General Assembly to consider next year or a measure to put on the 2024 ballot.

“This bill, in some ways, is not going to have any immediate impact on anyone’s life or anyone’s property taxes. It’s about the long-term conversation,” Fenberg said on the Senate floor. “This is acknowledging that there is a bigger, long-term issue that we still need to wrestle with.”

HB23B-1003 was sponsored by Fenberg, Rep. Marc Snyder of Manitou Springs and Sen. Kyle Mullica of Thornton, all Democrats.

House floor work interrupted

It was set up to be a relatively straightforward day at the Capitol, with the House and Senate giving final approval to bills and approving amendments from the other chamber.

Work stalled for about an hour in the House, however, during the third reading debate on the Summer EBT program bill as a dramatic scene played out in the House gallery.

Democratic Rep. Elisabeth Epps, a progressive lawmaker from Denver, tried to introduce an amendment that would prohibit Summer EBT dollars from being used on products that originate in Palestinian territories. She tried to offer the amendment Sunday night as well, but the chamber did not vote on it after managers determined it did not fit the title of the bill.

“This amendment assures that those of us who have relied and do rely (on food benefits) do not have to be complicit at every turn,” she said on Sunday night, referring to the ongoing Israel-Hamas war.

The argument is that Colorado dollars to help feed local children shouldn’t also benefit the Israeli government. About 5,000 children in Gaza have been killed in the ongoing bombardment from the Israeli military so far, according to Gaza’s Health Ministry. 

Epps brought the amendment up on third reading Monday afternoon, but the House — which needs to approve the introduction of an amendment on third reading — did not let it get introduced. Epps continued floor comments on the bill, and ended her remarks by saying, “Free Palestine.”

That prompted immediate outcry from members of the Republican caucus, many of whom displayed Israeli flags on their desks during the legislative session. The House went into recess, and leadership huddled to decide how to proceed. Rep. Ron Weinberg, who is the only Jewish member of the Republican House caucus, wanted to be allowed to respond to Epps’ comments, even though it technically wouldn’t concern the bill topic.

Leadership allowed him to do so, and Weinberg began his comments with the entire Republican caucus standing behind him at the front of the chamber. Moments in, Epps called out from the House gallery that Weinberg was out of order. The House stopped its work immediately.

Epps had moved to sit with pro-Palestinian activists, and remained with them in an upper-level gallery even after sergeants cleared the gallery. For the next hour, members of the Democratic caucus spoke with Epps to try and deescalate the situation, as Epps spoke emotionally about the need to call for a ceasefire in the Israel-Hamas war.

“I want to sit with people who don’t like genocide,” she said at one point.

After about an hour, Epps left the gallery and Weinberg resumed his comments. Nearly every member of the House stood in support as he spoke. Epps was not in the chamber, but she returned to vote in favor of the bill in question.

“There are atrocities being committed around the world. We all stand against them. No one in this chamber stands for genocide — I firmly believe that,” Weinberg said. “I will never seek to understand others’ motives as malicious or hateful, and I ask that you do the same for me. There is a crisis in the world today. If we do not stand as a body united, what good are we to the people we represent?”

The House moved through the rest of its business quickly and adjourned at about 3 p.m., followed by the Senate a short time later.

The Legislature reconvenes for its regular session on Jan. 10, 2024. 

Editor’s note: This story first appeared on Colorado Newsline, which is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Colorado Newsline maintains editorial independence. Contact Editor Quentin Young for questions: info@coloradonewsline.com. Follow Colorado Newsline on Facebook and Twitter.