Colorado voters on Tuesday soundly rejected Proposition HH, a complicated tax and spending measure that would have provided hundreds of dollars in property tax relief each year for the typical homeowner, while reducing state taxpayers’ refunds and expanding state spending on schools.
As of 8 a.m. Wednesday, the measure was being rejected by 60% of voters. Voters in just six counties — including Denver and Boulder — supported its passage. The Associated Press called the race before 8 p.m.
The overwhelming rejection of the ballot measure was a major defeat for Jared Polis, the state’s popular Democratic governor, who spent much of the past year pushing unsuccessfully for policies that he said would reduce housing costs across the state. His office authored Proposition HH, which was referred to the ballot at the eleventh hour by Democrats in the legislature. But the complex proposal never won over the enthusiastic support of liberals, while Republicans remained staunchly opposed to the measure and conservative groups spent millions to seek its defeat.
Conservatives celebrated Tuesday night at an Aurora sports bar, calling the measure a victory for Colorado’s government-limiting Taxpayer’s Bill of Rights.
“The message tonight is really simple: Government has enough money, live within your budget,” former Gov. Bill Owens, a Republican, told the crowd. “The only reason this was on the ballot was to do away with the TABOR refund. That was the only reason.”
Proposition HH’s failure means Coloradans’ property tax bills could go up as much as 40% on average next year without intervention by the General Assembly or local officials. There’s little time to make changes before local governments prepare their budgets and tax bills go out, so the legislature and Polis will have to decide soon whether to take action.
They could call a special lawmaking term before the end of the year or attempt to cut property tax rates when the legislature reconvenes in January. Republicans on Tuesday renewed calls for Polis to convene a special legislative session and have already put forth a number of broad property tax relief proposals in anticipation of the measure’s failure.
“The governor needs to call a special session — do it tonight, do it tomorrow, fix this property tax system immediately,” said Michael Fields, the leader of Advance Colorado Action, a conservative group that campaigned against the measure. “TABOR’s not going anywhere, and neither are we.”
Polis, who was at the Western Governors Association meeting Tuesday night in Jackson, Wyoming, issued a statement through a spokesperson.
“The governor thanks everyone who voted in this year’s election,” said Conor Cahill, Polis’ press secretary. “While he is disappointed voters didn’t pass a long-term property tax cut, he is currently considering next steps.”
Also looming large is a measure authored by conservatives on the 2024 statewide ballot that would cap annual property tax increases statewide at 4%, limiting the amount of money collected by schools and other local taxing authorities that rely on property tax revenue.
Some voters told The Colorado Sun they liked Proposition HH’s school funding provisions or its property tax cuts. Others said it didn’t provide enough cost savings to them personally, or that they didn’t want to cut taxes at all. And on Election Day, supporters and opponents alike expressed uncertainty — and confusion — about how the proposal would actually work.
Patrick Garvey, a Democrat, said he was conflicted, but voted against Proposition HH — “begrudgingly.”
“I feel like the issues within that proposition need to be isolated and voted on separately because it’s confusing for the average person,” said Garvey, who dropped off his ballot outside the Denver Botanic Gardens early Tuesday afternoon.
The measure was unusually complex even for Colorado, a state with a long tradition of asking voters to weigh in on complicated tax policy questions.
Proposition HH would have provided relief from rising property taxes on the one hand, by reducing the statewide residential assessment rate to 6.7% from 6.765% and expanding existing tax exemptions for homeowners.
On the other, it would have increased the state revenue cap under the Taxpayer’s Bill of Rights by 1 percentage point a year for at least the next 10 years. That would have reduced, or in some years even eliminated, taxpayer refunds owed under TABOR in years of strong economic growth.
In a statement, Senate President Steve Fenberg, D-Boulder, said Proposition HH was “about providing long-term tax relief for Colorado seniors and families” without harming schools and other local services. He blamed a “far right” misinformation campaign for the proposal’s defeat by voters.
“It’s unclear tonight what the pathway forward is,” said Fenberg, who chaired the campaign in favor of the measure, “but it’s clear the answer is not Initiative 50 (the conservative tax cut measure), which would amend the constitution to permanently reduce funding for schools, fire districts and libraries.”
The change to the TABOR cap could have allowed the state government to spend as much as $2.2 billion in additional tax revenue annually by 2032. The vast majority of that money would have gone to K-12 schools.
The boost to education funding was what won the vote of Susan Katz, a Boulder Democrat.
“We are totally open to paying more taxes, and we’re anxious for more money to go to education,” Katz said. “We like what the governor did with early childhood education (universal Pre-K) and we want to support him.”
But that message was largely missing from the campaign and from Polis himself, who tried to pitch voters on tax relief first and foremost.
That pitch was lost on some renters like Garvey, who didn’t expect to benefit from it. Chris Okere, a homeowner who cast his ballot in Boulder, said he voted for it, but with misgivings.
“It’s all about property taxes,” said Okere, a politically unaffiliated voter. “I didn’t think that it’s a great deal, but if we don’t do it, then our property taxes will go up 30 to 40%.”
Some of Proposition HH’s provisions were temporary, like a one-year change to the TABOR refund formula that would have given more to Coloradans who make under $99,000 a year, while reducing refund checks for higher earners.
The measure also would have provided some financial assistance to local governments to compensate for reduced property tax revenue, but the state aid was designed to be limited and fade over time. As a result, the measure was opposed by the Colorado Municipal League, Colorado Counties, Inc., and the Special District Association of Colorado, which represents local governments across the state.
Meanwhile, the true impact of other provisions would have depended greatly on future unknowns, like the economy and the decisions of future elected officials.
Roughly $5.5 million was raised and spent by issue committees trying to persuade voters to approve or reject Proposition HH through mailers, text messages and TV ads. The money mostly came from political nonprofits that don’t disclose their donors — what The Colorado Sun refers to as dark-money groups — and it was roughly evenly split between the lone committee supporting the measure and the five committees opposing it.
Property Tax Relief Now, the committee that supported the initiative, received donations up until Election Day, including $46,000 on Monday from five nonprofits and individuals. It raised a total of about $2.9 million.
The committee’s largest donors included two national liberal nonprofits that don’t disclose their donors: the Sixteen Thirty Fund, which gave Property Tax Relief Now $600,000, and Education Reform Now Advocacy, which gave the committee $660,000. Boldly Forward, which donated nearly $400,000, is a nonprofit associated with Polis that also doesn’t disclose its donors. The National Education Association, the country’s largest teachers union, gave $200,000.
Five issue committees opposed the measure, including No on HH, which alone raised north of $2 million to combat the initiative. No on HH received $1.2 million alone from Advance Colorado Action, a conservative political nonprofit that doesn’t disclose its donors. It also received $600,000 from Defend Colorado, another conservative political nonprofit that doesn’t disclose its donors.
Americans for Prosperity, a national conservative political nonprofit that doesn’t reveal its donors, spent $405,000 to defeat the question.
Other opponents included the Colorado Association of Realtors and the state branch of the National Federation of Independent Businesses.
Proposition HH was supported by AARP Colorado, the Colorado Association of School Boards, Colorado Professional Firefighters and Colorado Concern, a nonprofit made up of CEOs in the state.
Staff writers Sandra Fish, Erica Breunlin, Parker Yamasaki and Clare Zhang contributed to this report.