An overhead view of the Senate chambers

There is no getting around the ugliness of Colorado’s budget debacle created by roaring property values and broken tax-limitation laws.

A complex proposal by Colorado legislative Democrats and Gov. Jared Polis created to address the looming property tax-hike crisis is far from neat and tidy, but it’s workable and should be approved with some small changes.

Over the past few years, property values across the state have soared. While sellers, and even those just marveling at their home investment, have often been pleased, reality in the form of rocketing potential tax bills have created the ultimate fun crusher.

Much of the ugliness is the convoluted nature of Colorado property taxes, a monstrosity of pieced-together notions and ideas made toxic with the 1992 creation of the so-called Taxpayer Bill of Rights.

In short, property taxes are based on the “assessed” value of your home. That complicated effort estimates the market value of your property. Taxes are raised by multiplying that value times the tax rate, a mill levy. You don’t pay taxes on the actual value of your home, however, but on the “assessed” value. That’s the rate, set by law, that creates the much smaller base for your mill levy.

Regardless of how large or small that assessment rate is, when property values go up, so does the smaller, assessed, tax base, and so do taxes.

Property values have risen so high, so fast, that average home tax bills are expected to increase upwards of $100 a month, for those who pay them with their mortgages on a home valued at about $700,000. The net tax increase is about double that in some mountain communities, according to state officials.

In other states, lawmakers and state officials could simply reduce the assessed value rate to compensate for the increased property value. In part, that’s what Proposition HH proponents want to do.

But Colorado is unique in that it’s the only state saddled with a broken and injurious TABOR amendment. Lauded by far-right tax protesters, the measure was sold to voters in 1992 as a way to keep lawmakers from raising taxes without a vote. The insidious measure was actually a Trojan horse of legislation that has hamstrung Colorado and all its local governments for decades. The idea of TABOR is so bad that no other state has ever adopted it, despite its special place in the hearts of the far-right.

Because of TABOR, the state is forced to not just reduce the assessment rate, but then move state money through a complicated procedure to protect things like already-too-small public school budgets and other local services, like sewer districts.

A better solution would be for lawmakers to ask voters this fall to right the state constitutional wrongs created by TABOR, and Amendment 23 — created to offset the deleterious effects of TABOR — by removing them from the state Constitution. That’s politically unfeasible right now.

Instead, lawmakers will ask voters to essentially lop $40,000 of value off of every residential property valuation in the state, and slightly reduce the assessment rate. At the same time, the proposal would cartwheel around TABOR to ensure some government budgets aren’t destroyed by the complicated changes.

Republicans say Democrats are creating a needlessly complicated fix with a 10-year lifespan as a ruse. That’s not true. Because of TABOR and other state tax mechanisms, only something this complex can ensure staving off an imminent tax increase and stabilize revenues for government services.

The universal $40,000 in property value reduction is a clever way of ensuring everyone gets the same tax break, without moving the lion’s share of lower taxes to the wealthiest Colorado residents who own the most expensive homes.

But state legislators should go further in this first year of implementation by reducing the residential assessment rate lower than the proposed 6.765% to 6.7%. The proposal is not low enough in areas where real estate boons have driven home prices sky high for blue-collar families, already struggling hard against inflation. Since there are no “exemptions” for almost all of these families, only state lawmakers can ensure these middle-income residents are protected.

Likewise, the measure currently offers renters no protection from landlords eager to hike rents to pass any increases onto those who actually pay their mortgage bills.

State Rep. Mike Weissman, D-Aurora, is among those who are proposing tax rebates of some kind for those renters left holding the increased tax bag.

The package is awkward, complicated and difficult to understand. Getting it past voters will be arduous, especially with opponents making false claims rather than meaningful suggestions for important changes. But given the statutory cards Colorado has been dealt with TABOR, Proposal HH is a sound and critical response to mitigating the state’s imminent tax crisis.

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7 Comments

  1. Having only living here for 5.5 years and owning a home in Aurora for 5 of them. It is fascinating to watch Colorado’s race downward. We moved here near the end of the “young people moving to Colorado trend” and now it seems like the state is destined to hemorrhage citizens and tax dollars to states that are willing to enforce law and govern with principles. During the last decade they had the chance to capitalize on Colorado’s popularity by controlling crime, homeless and plan for the financial future but they’ve failed in all of that. The results of that failure are here to manifest themselves. Also, having my car stolen out of my driveway at 6am on a workday has left a very sour taste in my mouth after watching politicians drone on about how republicans in other states are the real threat to our safety. We are not long for the state of Colorado and sadly I can’t say I’ll be sad when we move away.

  2. What a pack of lies. The current problem with property taxes has nothing to do with the Taxpayer Bill of Rights. It has a lot to do with the mis-truths that you were given to repeal the Gallagher Amendment. Remember the manipulative language, “Without raising your tax rate.” Please go to UTUBE: Ben Murray, Independence Institute. THEY LIED TO YOU ONCE. DO NOT LET THEM LIE TO YOU AGAIN!

    Rod Bockenfeld
    State Representative
    Eastern Arapahoe & Adams Counties
    Member: Joint Budget Committee

  3. A better solution would be for lawmakers to ask voters this fall to right the state constitutional wrongs created by TABOR, and Amendment 23 — created to offset the deleterious effects of TABOR — by removing them from the state Constitution. That’s politically unfeasible right now.”

    LOL, how, exactly? This is a state dominated by the far-left Front Range and mountain towns. You’re telling me in one breath that TABOR is so bad no other state’s adopted it, and then in the second breath that it’s apparently so popular in Colorado that even Democrat voters can’t be convinced to get rid of it despite their side absolutely LOVING high tax rates on everyone who they think makes more than they do?

  4. Colorado is headed to the same end as NY, J, IL and CA. start the mourning….

  5. Being a CPA, I see right through the inaccuracies in this editorial written by a bunch of journalists, not really understanding this complex situation. I’ll not go into details but the homeowners in Colorado by November will fully understand that this regulation does not work and will keep the outrageous increase in property taxes and will decrease, materially, our TABOR refund.

    I suspect that by November even this Blog will editorialize that they were wrong in these statements. Alas, they may not be in business to make this reporting.

  6. 30 years ago, the voters of this state voted to cap taxes and expenditures to a rate not to exceed inflation and population adjustments. Sounds like a wonderfully simple answer to a complex issue. I wonder if Doug Bruce’s creation to handcuff elected officials was designed to handle financial crises, pandemics, and high inflation followed by the reversal of inflation. Judging by the state of our education, homelessness, crime, and prison system, apparently not.

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