The Colorado legislature’s 2024 lawmaking term begins Wednesday and the Democratic majority at the Capitol has a lot of unfinished business on its to-do list.
Increasing the state’s affordable housing stock and offering property tax relief are the top agenda items, but close behind are efforts to reduce greenhouse gas emissions and close a longstanding K-12 funding deficit.
“We see the big issues facing us this year to be in a lot of ways a continuation of the ones that we’ve been working on for the last few years,” Senate President Steve Fenberg, D-Boulder, told The Colorado Sun. “But we’re excited to be taking the next step in a lot of these fights.”
All of that work will have to happen in a General Assembly that’s embroiled in more acrimony than at any time in recent memory.
Here are the eight big storylines to watch in the legislature this year:
Expect a resurrection of the land-use bill that failed last year, except this time in “bite-sized” pieces
A lot of ambitious housing ideas faltered near the finish line at the Capitol last year.
Chief among them was Gov. Jared Polis’ sweeping land-use measure, which sought to increase the supply of housing primarily by blocking an array of local zoning rules that promote single-family homes and restrict density. The Democratic majority at the Capitol couldn’t agree on what should be in the legislation, so it was shelved at the eleventh hour.
Democrats told The Sun to expect the proposal to be resurrected this year, with one key difference: the governor’s priorities will be broken up into separate “bite-sized” measures.
“The bill last year had so much in it,” Fenberg said. “I think that’s why it collapsed — it sort of collapsed under its own weight.”
This year, Fenberg said one bill will promote higher density housing near public transit stops, while others will prohibit parking mandates and local restrictions on accessory-dwelling units, require regional housing assessments, and outlaw many limits on how many unrelated people can live in a home, with exceptions for health and safety-related rules.
In an attempt to win over support from local governments, who helped torpedo Polis’ proposal last year, Fenberg said lawmakers will avoid laws that take away cities’ ability to control neighborhood planning.
“I think this is going to look a lot more like the incentives than requirements and mandates,” Fenberg said.
Polis, however, still views restrictive local land-use policies as a major barrier to a more affordable Colorado. In an interview with The Sun, he suggested he may still push for the state to take a stronger hand in local zoning codes.
“The most inherently affordable kinds of housing” — such as condominiums, duplexes and townhomes — “those kinds of homes have been the least likely to have been built over the last decade,” Polis said. “I think that defending property rights is a basic Colorado value. And too often those property rights are infringed upon by government.”
Two other proposals that failed in the legislature last year and which are likely to return in 2024: an effort to lift a state prohibition on local rent control and a measure that would make it harder for landlords to evict tenants.
Both are priorities for the most progressive Democrats in the General Assembly — and Polis appears unlikely to support either.
“I’m very skeptical of anything that would raise rents, and I would put those two in that category,” Polis said. “The cities that have (rent control) have the highest rent. It makes Colorado look dirt cheap.”
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Three other proposals to watch:
- A bill backed by tenant rights groups that would make it easier for tenants to sue landlords when their home violates habitability standards
- An income tax credit for renters
- Changes to the state’s construction defects laws, which govern when and how homeowners can sue homebuilders for shoddy work
Democratic leaders in the legislature are less jazzed about construction defects reform, telling The Sun this week that they are more focused on other paths toward affordable housing. But developers see reducing litigation against condominium builders as a key part of the conversation, and Polis said he’s “very supportive” of changes, though he doesn’t see them as a silver bullet.
Property tax relief and changing rates for homes offered as short-term rentals
Ask almost anyone at the state Capitol what the legislature plans to do about property taxes after the failure of Proposition HH in November, and you’ll probably get a version of the same answer: to be determined.
Top lawmakers and the governor’s office are awaiting the final recommendations of a bipartisan tax commission studying long-term changes to the state’s property tax code. The task force was created in November during the special legislative session on property tax and other financial relief and its report is due to the General Assembly in March.
The commission has held two meetings so far in search of a political unicorn — an overhaul to the state tax code that can simultaneously mitigate sticker shock for homeowners without harming schools and local services across the state.
With voters’ repeal of the tax-limiting Gallagher Amendment in 2020, school districts and local governments are generating more funding than they have in decades. But homeowners have been left facing large increases in their tax bills, even after lawmakers passed temporary tax cuts to soften the financial blow.
If lawmakers can’t come to a deal that appeals to both sides, they face new ballot pushes from interest groups on the right and the left. A conservative measure proposed for the 2024 election would enact statewide limits on property tax growth, while a liberal proposal filed in response would allow the legislature to enact a new luxury tax on homes.
As with the November special session, expect negotiations to hinge on a few levers: how big of a cut to provide, how to distribute those cuts equitably to those who can least afford the cost of housing, and how to offset the financial impact to local services.
There’s already bipartisan support for updating the senior homestead exemption — if lawmakers can agree on how to reimburse local governments for the reduction in revenue.
Senate Minority Leader Paul Lundeen, R-Monument, told The Sun that making the exemption portable so seniors don’t lose it when they move to a new home is one of his top tax priorities for this year. House Speaker Julie McCluskie, D-Dillon, said she wants to go a step further and provide more targeted property tax cuts for low-income seniors.
One new idea gaining traction in early discussions: Sen. Chris Hansen, D-Denver, who chairs the property tax task force, wants to smooth any increases in property assessments over multiple years to prevent the huge periodic jumps created by Colorado’s two-year assessment cycle.
Separate from the property tax relief conversation is a proposed bill that would quadruple the property taxes on homes rented as short-term rentals on sites like Airbnb and Vrbo for more than 90 days a year.
Democrats and Republicans — and Polis, too — say it’s unfair that the properties effectively operate as hotels but are taxed at a much lower rate. But short-term rental owners are fiercely opposed to the idea and have showed up at the Capitol en masse to protest.
Hansen, who is leading the push for the change, said to expect “significant amendments to the bill, endorsed by an interim committee on tax policy in the fall. Among the likely changes is a provision tailoring tax rates to how many days a year a short-term rental is rented, with properties that are rented out more days facing higher taxes.
“The balance that we’re trying to strike is to be able to allow people to own second, third properties, use them on a part-time basis and making sure that they’re taxed at an appropriate rate for that,” he said, “but then treating that differently from the corporate properties, the giant conglomerates that own thousands of these units across the state that are basically running them as hotels.
“I think we’re just trying to do a thoughtful job of creating tax fairness,” Hansen added. “The intent here is not to destroy a certain business model or make things really tough on folks who do part-time rentals.”
Possibly a new funding source for transit
Democrats don’t want to just encourage more housing near train and bus stops. They want to boost transit offerings, too.
“We’re trying to figure out: are we allocating the transportation money we have now in the best way to meet our goals?” said Sen. Faith Winter, a Westminster Democrat. “We’re looking at new funding sources.”
Whether that means additional fees or a tax increase remains unclear.
The legislature hasn’t really touched transportation funding since 2021, when Democrats passed a major measure, Senate Bill 260, imposing fees on gasoline purchases, deliveries and rideshare trips to tackle the state’s multibillion-dollar infrastructure backlog.
“Because 260 in a lot of ways was about catching up from decades of underinvestment, we’re probably going to need additional funding for longer term investments in transit,” Fenberg said. “I don’t know the details of what that looks like.”
The governor appears to be on board.
“The way that I look at it is the way I look at anything,” Polis told The Sun. “Does it net save people money? I absolutely think there is the opportunity to save people money with more and better transit.”
Additionally, the legislature is slated to debate a bill this year that would impose a new registration fee on vehicles in the state’s 12 most populous counties, with the owners of heavier ones — like sports utility vehicles and pickup trucks — charged more. The money would go toward road-safety efforts, particularly those aimed at protecting pedestrians.
Investments in renewables, crack-down on air pollution
Transit and housing both figure to play a role in whether Colorado meets its targets for reducing greenhouse gas emissions that contribute to climate change.
But environmental groups and many lawmakers say that while emissions have been falling, the state needs to do even more.
Top Democrats say they plan a mix of regulatory crackdowns on polluters and new investments in renewable energy this year, after a new study found the state is only projected to hit 80% of its 2025 emission reduction target and 85% of its 2030 goal. Despite its public commitments to reducing carbon emissions, Colorado utilities rely more heavily on coal for electricity than the typical state.
“In a lot of ways, we are no longer a leader,” Fenberg said. “We are sort of middle of the pack or even sometimes at the bottom, when it comes to some of the key metrics for renewable energy generation,” like rooftop solar and community solar gardens.
Fenberg said Democrats also plan to create new enforcement mechanisms to regulate air pollution, particularly in disproportionately impacted communities.
Expect Democrats to shine a spotlight on oil and gas permitting, in particular. Last fall, environmental groups told an interim committee on air quality that state regulators today effectively “rubber stamp” new pollution through the permitting process. That’s despite a 2019 state law directing state regulators to prioritize health and the environment in their oversight of oil and gas activity.
“There’s only been one permit denied since we passed (Senate Bill 181 in 2019), which was to take into account health and environment, and I don’t see that happening as our ozone levels get higher and higher,” Winter said at the committee’s final meeting in December.
On water, expect recommendations from a drought task force to take center stage. Proposals include expanded protections for streams, and funding to remove water-guzzling lawns and replace leaky infrastructure.
Guns, public safety and criminal justice reform
On the public safety front, House Majority Leader Monica Duran, D-Wheat Ridge, said Democrats will work this year to pass a bill barring firearm possession in places like schools, parks and public buildings.
The governor’s budget also calls for spending $600,000 to hire a group of attorneys who would be loaned out to the federal government to prosecute gun crimes in federal court, including to pursue cases that are no longer illegal under state law.
In terms of broader public safety and criminal justice reform measures, Polis formed a task force in October charged with presenting recommendations to him and the legislature by March 1. The panel replaced the Colorado Commission on Criminal and Juvenile Justice, which Democrats in the legislature last year voted to disband.
Two bills that failed in 2023 that may return in 2024 would authorize the opening of a site in Denver where people could openly use illicit drugs under the supervision of workers trained to reverse overdoses and raise the minimum age for criminal prosecution in Colorado to 13 from 10.
Funding for K-12 and higher education
When it comes to K-12 funding, the biggest achievement of the 2024 legislative session is likely to be something lawmakers have already committed to — eliminating the budget stabilization factor.
Under the Great Recession-era budget balancing device, the state has paid schools nearly $10 billion less than required under the state constitution. Amendment 23 requires K-12 spending to keep up with inflation and enrollment growth each year — and each year since 2009, lawmakers have said they can’t afford it.
That all changed last session, when the School Finance Act called for eliminating the budget stabilization factor in the 2024-25 budget year. Polis’ budget proposal for next year holds to that promise, and top lawmakers on the Joint Budget Committee say they expect to follow through.
Now, lawmakers face a question they haven’t confronted in decades: is “fully funding” schools under Amendment 23 actually enough?
Democrats say “no,” pointing to teacher shortages and plummeting student achievement in the wake of the pandemic. But until now, there’s been little appetite to discuss anything other than catching up to the minimum funding level.
There’s pent-up pressure to adjust the school finance formula to ensure schools are receiving their fair share of the pie, after last year’s school funding bill side-stepped a politically thorny overhaul. Budget writers are also looking to increase funding for so-called “categorical” programs like special education and English language proficiency that schools are constitutionally required to provide whether the state adequately funds them or not.
“The beauty of paying down the budget stabilization factor, in my mind, is that we can finally focus on these other things that have always been there and have been pushed into the background because we had to take care of business first,” said Sen. Rachel Zenzinger, D-Arvada, vice chair of the Joint Budget Committee.
While K-12 heads into 2024 on an optimistic note, a fight is brewing over higher education. Polis is proposing de facto cuts to public universities when you account for inflation, while budget writers say the state needs to increase funding to keep tuition low.
Bated breath about the Capitol culture
The 2023 legislative session was considered one of the most acrimonious in recent memory. Most of the drama was in the House, where Democrats and Republicans clashed among themselves and with each other.
Two first-year House Democrats resigned in the aftermath, and lawmakers, lobbyists and journalists worry this year at the Capitol may be even worse. Two combustible factors are the 2024 election and the Israel-Hamas war in the Middle East.
McCluskie and House Minority Leader Mike Lynch, R-Wellington, said they are working to address discord and prevent more of it.
“We are underway with work to help our members better understand some of the expectations,” McCluskie said.
Lynch said there is a delicate balance between trying to maintain decorum and infringing on someone’s free speech rights.
“I’m very cautious to make sure that we don’t in the process … throw the baby out with the bathwater,” he said.
Republicans remain at a major disadvantage. How will they handle it?
Republicans in the General Assembly have debated for years whether to try to work with Democrats or serve as a total foil to their majority. They’ve gone down both paths with limited policy success and a lot of electoral failure.
Anything the GOP minority wants to get done at the Capitol needs a sign off from Democrats. It’s been that way since 2019, and Republicans have only lost more ground since.
Democrats now hold a 46-19 supermajority in the House and a 23-12 advantage in the Senate. The governor is also a Democrat.
Last year, Republicans in the House tried to impose their will through delay tactics, namely filibustering. In a talk-a-thon game of chicken with Democrats, however, the GOP lost when McCluskie and Duran took the exceedingly rare step of cutting them off by limiting debate.
When the backlash was minimal, Democrats kept using their power to prevent Republicans from forcing the chamber to work long hours, sometimes even overnight.
The Senate GOP was more measured in their approach, but they tried to play hardball — and lost — during the special session in November.
How the GOP operates at the Capitol — or doesn’t — this year will be worth watching.