Opinion: Proposition HH offers property-tax relief to homeowners, businesses and renters

As the former Colorado state treasurer, I’ve spent my career keeping Colorado’s budget balanced and our debt levels low. I’ve worked to keep our government as lean and efficient as possible while ensuring schools and other local services like water, fire protection, transit, and health have the funding they need.

I support Proposition HH because it keeps Colorado’s property taxes low. Property taxes are an onerous tax. They become unaffordable for families when home values rise faster than incomes. They burden small businesses that compete with online sellers. And they hurt renters who pay property tax through their rent.

Colorado home values are up more than 40 percent, on average, during the 2023 assessment cycle (2020-2022 value growth). That means the average homeowner will see their property tax bill go up by more than $1,000. Many families across our state cannot afford this increase, especially with the high cost of living. Many landlords will pass the increase directly to renters, making housing even more unaffordable in our state. Proposition HH will cut these increases in half according to an analysis done by the Colorado Fiscal Institute. That’s real savings for everyone in our state. With Proposition HH, we can create broad economic benefits that help homeowners, small businesses, and renters.

That said, I also understand the critical importance of the funds generated from property taxes for local services, like our schools and fire protection. Proposition HH is a responsible property tax cut that protects funding for local services. It raises the state TABOR spending cap by 1% annually to replace property tax that would be lost to schools and local governments. As important as it is to reduce property taxes in order to keep housing as affordable as possible and to enable businesses to compete with online sellers, now is not the time to take away funding from schools, fire protection, and other local services. Many local governments, especially in less affluent areas, cannot absorb cuts.

This backfill is especially critical for K-12 education because spending constraints in our state Constitution have eroded inflation-adjusted per-pupil funding for public schools for decades. Today more than half of Colorado’s school districts pay teachers less than $45,000 and as a result, schools simply cannot attract and retain the educators they need. Schools across our state struggle to afford air conditioning, bus drivers, healthy lunches, and qualified teachers. 

Opponents claim Proposition HH will eliminate TABOR refunds. This isn’t true. When Colorado’s economy grows there will still be large TABOR refunds. If Proposition HH passes, everyone will get more than $800 in a TABOR refund this year (more than the $750 we got last year) plus the savings on their property taxes. In 2024, the average refund will be reduced by only $46 if Proposition HH passes. That means in 2024 the average taxpayer can expect $483 in property tax savings plus a $500 TABOR refund, according to the election Bluebook. If state revenues grow 5% annually over the next decade, Colorado families can still expect $10,000 in TABOR refunds over the decade if Prop HH passes, according to an analysis by the Colorado Fiscal Institute.

Finally, Proposition HH will help seniors in our state, who are particularly vulnerable to rising costs because they often live on fixed incomes. Currently, seniors who qualify for the homestead property tax exemption will lose the benefit if they move. This means seniors’ property taxes increase significantly when they move. A recent study indicated the financial costs of losing the benefit prevents seniors from downsizing and is exacerbating the housing crisis. Proposition HH fixes this problem by allowing seniors who have already moved, or who move in the future, to continue claiming the same benefit.

Proposition HH is a win-win for Colorado taxpayers: property taxes will be held down for at least a decade and taxpayers will continue to get large refunds when our state’s economy grows. And voters can rest assured that their property tax relief won’t equate to cuts in schools or local services in their communities. Given the historic underfunding of education in our state, Proposition HH is the right policy to keep property taxes low and support public education.

Cary Kennedy, of Denver, is the former state treasurer and currently serves as an advisor to Gov. Jared Polis.