Gov. Jared Polis will vote for Proposition 120, the ballot measure that gives other Democrats pause because it would slash property tax assessment rates for multifamily residential properties and lodging properties.
Polis, who stated his position Monday when asked by The Colorado Sun, didn’t elaborate on why he is voting for the proposition, which is on the Nov. 2 ballot and backed by conservatives.
A spokesman later distanced the governor from the stance.
“You asked how he plans to fill out his ballot and the governor told you how he is doing so as a Colorado voter,” Conor Cahill, a spokesman for the governor, said in a written statement. “The governor has not officially endorsed these ballot measures or campaigned for or against them, he was simply answering the question asked.”
The position is sure to draw the ire of fellow Democrats, who argue Proposition 120 will hurt local government coffers and that Senate Bill 293, the temporary property tax reduction measure passed by the legislature this year, is sufficient to help counteract rising property values.
“Proposition 120 is a step backward for Colorado and will undermine funding for schools, fire protection and water districts,” state Sen. Chris Hansen, a Denver Democrat who sits on the Joint Budget Committee, said in a written statement.
If approved by voters, Proposition 120 would reduce the property tax assessment rates for multifamily housing to 6.5% from 7.15% starting in 2022. If you owned affected property valued at $300,000, you would pay $1,950 per 100 mills (a mill is a $1 payment on every $1,000 of assessed value) versus $2,145.
The rate for lodging properties would also be reduced to 26.4% from 29%. If you owned affected property valued at $300,000, you would pay $7,920 versus $8,700.
But opponents of Proposition 120 worry most about the potential that the ballot measure could trigger an across-the-board tax cut.
The proposition was initially meant to cut all residential property tax assessment rates to 6.5% and all commercial property tax assessment rates to 26.4%, which would result in a local tax revenue reduction of more than $1 billion. But Senate Bill 293, which was driven by Hansen and other state lawmakers worried about the potential revenue hit, severely limited Proposition 120 by creating new property tax subcategories that would in turn limit the ballot measure’s rate reduction to multifamily residential and lodging properties.
Colorado Rising Action Executive Director Michael Fields, a conservative tax policy activist who is leading the push for Proposition 120, has vowed to file a lawsuit to invalidate Senate Bill 293 if 120 passes.
Senate Bill 293 decreased the property tax assessment rate for tax years 2022 and 2023 for the following property subcategories:
- Single-family properties are taxed on 6.9% percent of assessed value, down from from 7.15%
- Multifamily properties are taxed on 6.8%, down from 7.15%
- Agricultural property’s rate dropped to 26.4% from 29%
- Property used to produce renewable energy is taxed on 26.4% of assessed value, down from 29%
The assessment rate works like this: If property’s fair-market value is $1 million, its assessed value for purposes of taxation is $264,000 if it’s considered a commercial property covered under Senate Bill 293. If it is considered a residential property covered under Senate Bill 293, its assessed value is $69,000.
Senate Bill 293 was introduced and passed as supporters of Proposition 120 were gathering signatures to secure its spot on the November ballot.
Fields said he thinks a judge will find that Senate Bill 293 illegally targeted his measure. “They can’t kneecap or adjust our ballot initiative when it’s already through the process.”
Scott Wasserman, an opponent of 120 who leads the liberal-leaning Bell Policy Center, blasted the governor for voting for the measure.
“It’s not for nothing that every progressive organization and organizations like Club 20 are opposed to Prop. 120,” Wasserman said. “It’s a reckless political stunt funded by the very same interests that are launching attacks against the governor’s leadership. If he thinks he’s somehow achieving ‘peace in our time’ with these folks, I think he’s making a very bad calculation.”
Wasserman also said he thinks Polis’ vote for the measure is a signal that the governor believes in the legality of Senate Bill 293. “I think he’s signaling an awful lot of confidence,” Wasserman said.
This isn’t the first time the governor has taken a position contrary to his party on a tax-policy ballot question. Last year, he praised Proposition 116, the successful income tax rate reduction measure.
In August, Polis said that he’s in favor of eliminating Colorado’s income tax.
The governor also said Monday that he will be voting against Amendment 78, which would change the way the state approves spending money from the federal government, legal settlements and other non-state sources.