At nearly the last minute of the legislative session, the Colorado General Assembly managed to divert what would have been a rolling disaster across the Colorado economy, passing a bill that will prevent property taxes from rising dramatically beginning in 2024, due to the rapid increase in Colorado property values.
What began as SB23-303 became a compromise bill by the time its house version passed the Colorado House. The Monday evening debate was not without drama, as this and other bills caused the minority party Republicans to exit the chambers, temporarily pausing debate.
The bill is projected to save taxpayers more than $1 billion on their property taxes, averting some, but not all of the property tax increase. According to Section 3 of the Bill Summary, it requires the secretary of state to refer a ballot issue to voters at the November 2023 election that asks voters whether property taxes should be reduced. The same bill seeks voter approval to retain and spend excess state revenues that will be used to backfill some of the reduced property tax revenue.
The bill was sponsored by Senate President Steve Fenberg, D-Boulder, and Senator Chris Hansen, D-Denver with the goal of creating a long-term solution to prevent growing home values from raising property taxes. The bill was intended to add limits that protect homeowners and businesses from steep unexpected increases in their property taxes.
Local government property tax revenue limit
Beginning with the 2023 property tax year, section 6 establishes a limit on specified property tax revenue for local governments, excluding those that are home rule and school districts, that is equal to inflation above the property tax revenue from the prior property tax year (limit).
A local government may establish a temporary property tax credit, which does not change the gross mill levy, that is up to the number of mills necessary to prevent the local government’s property tax revenue from exceeding the limit.
For more background see:
Ouch! Colorado Property Valuations are Rising 40 to 60 Percent, Taxes Likely to Follow
Colorado Senate Approves Landmark Plan to Provide Urgent Property Tax Relief