This November, Colorado voters can decide whether to reduce our property taxes – benefiting both homeowners and small businesses across the entire state. Proposition 120 gives voters the opportunity to approve a $1 billion tax reduction, which will specifically help our disabled veterans and seniors by boosting the state’s Homestead Exemption Fund by $25 million, helping keep these valued community members in their homes.
The measure reduces the multifamily residential property tax assessment rate from 7.15 percent to 6.5 percent, as well as tax assessment rates for commercial property, including lodging, hotels and motels, from 29 percent to 26.5 percent. For small businesses and multifamily housing properties, many of which were hit hard by eviction bans and delays in rental assistance funding, the out-of-control rise in property taxes could mean unsustainable rent increases just to make property tax payments.
When voters approved a repeal of the property tax assessment formula known as the Gallagher Amendment in 2020, it left the state without any checks on skyrocketing residential and commercial property tax rates. Voting yes on Prop 120 will help everyone across Colorado keep more of their hard-earned money, especially those who rent rather than own their own homes. Cutting property taxes by approving Prop 120 would help make rent more affordable because property owners include the cost of property taxes in the cost of rent.
More than 70% of the rental properties in the Denver Metro Area are 7 units or fewer. This property tax cut is necessary to help these property owners keep up with the rising cost of goods and services, particularly as property values continue to rise and the cost of living increases as well. This last year, our members reported an average 10 percent increase in wages for maintenance and other service staff in order to keep up with increased wages across the labor market.
Lowering property tax increases by voting yes on Prop 120 is a reasonable step to protect working people and small businesses from rapidly soaring tax assessments as a result of the record-breaking increases in property values across our state. Coloradans across the state received property tax assessments that rose as much as 20 percent in 2020, and 2022 property taxes are expected to increase another 20 percent above where they would have been if the Gallagher Amendment had not been repealed in 2020.
Voting yes on Prop 120 also protects seniors and disabled veterans. Colorado’s Homestead Exemption reduces the amount of property taxes that seniors over 65 and disabled veterans owe on their properties. These community members often live on fixed incomes that cannot accommodate the up-to-20 percent per year increases in property taxes we are currently seeing around the state.
Furthermore, Colorado’s TABOR Amendment caps annual increases to the state’s budget. Any tax revenues over that cap must be refunded to taxpayers, which happened during the 2020 fiscal year and is expected again in 2021. By approving this property tax measure, voters would help more Coloradans keep their own hard-earned money before taxes, and keep that money in the economy, helping our state continue to come out of the pandemic strong.
Approving Proposition 120 and controlling property tax inflation ensures that Colorado families and small businesses receive a much-needed stimulus instead of adding to our already sky-high living expenses. Keeping Colorado’s economy strong depends on making sure Colorado families can afford to live here. I urge you to vote yes on Prop 120!
Drew Hamrick is the General Counsel and Senior VP of Government Affairs for the Colorado Apartment Association