The Legislature has convened this week for yet another Special Session to address property tax growth. The decision to convene the Special Session is based on significant concerns by state leaders of two ballot initiatives, 50 & 108, slated for the November ballot. These initiatives are estimated to cost up to $3 billion in state and local funding of services if approved by voters.
Based on this potential impact, an agreement was brokered between the Governor and the proponents of the ballot initiatives. The proponents have demanded a Special Session be convened to pass legislation that extends the property tax relief achieved in Senate Bill 24-233 and reduce the growth caps even further. In return for passage of such legislation, the proponents will remove their initiatives for this election year.
Approximately 10 other new property tax bills have been introduced, and some have been defeated already. However, HB 1001 is intended as the “compromise” bill between the parties and amendments to the bill will be proposed as it moves through the process:
Details of HB 1001:
The bill expands language in Senate Bill 24-233 which passed during the 2024 Regular Session and includes but is not limited to the following details:
- Reduces the property-tax-revenue growth caps on local governments to 5.25% and imposes a 6% annual growth cap on the amount of tax revenue collected for schools.
- Expands some non-residential property tax relief by adding state-assessed industrial property and vacant land, as well as agricultural property.
- Lowers assessment rates on residential property to 6.25% for the local-government portion and 7.05% for the school portion.
- The bill also includes the continued protection of pre-authorized bonds for commercial and residential infrastructure that was provided in SB 233 but not in the ballot initiatives. Lack of such protection has caused great concern among investors and bondholders and could stifle housing growth.
For the purposes of Colorado Chamber members, the beneficiaries of HB 1001 will primarily be owners of vacant land and state-assessed property. The other non-residential tax rates were not reduced or increased beyond what was achieved through SB 233.
Opponents of this legislation include local governments: fire, library, water and other special districts, who say the additional property tax cuts in this bill will severely impact services in local communities by up to $600 million. Other concerns have been raised by representatives of school districts regarding the growth cap cuts for schools. See comments during the Property Tax Commission meeting.
The Colorado Chamber supports HB 1001 as introduced based on the extension of the non-residential tax cuts achieved in SB 233 to state-assessed, industrial property owners.
Please contact Meghan Dollar ([email protected]) for more information.