On the first day of the state legislature’s special session on property taxes, Colorado lawmakers Monday shut down a series of attempts by progressive Democrats to limit proposed tax breaks for wealthier homeowners and steer more tax relief toward the middle class.
The moves frustrated the party’s most liberal lawmakers, who complained that the General Assembly was caving to wealthy interests rather than legislating on behalf of their constituents.
“This has been a very disappointing process,” state Rep. Emily Sirota, a Denver Democrat, said Monday in the House Appropriations Committee.
Rejecting the proposals helped protect the $255 million tax cut deal legislative leaders struck ahead of the session in exchange for conservative groups abandoning a November campaign to enact even deeper cuts at the ballot.
That deal moved forward Monday, emerging from the House Appropriations Committee with a handful of small changes. But after a long day of committee hearings, delayed at times by technical glitches, House leaders pushed a floor debate on the measure until Tuesday, ensuring the special session would continue through Thursday.
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It takes at least three days to pass a bill out of both chambers.
At a media availability Monday morning, top Democrats insisted that the deal negotiated before the session wasn’t set in stone.
“This is a bill like any other bill and we will look at amendments and changes as it goes through all the steps of the legislative process,” said House Speaker Julie McCluskie, a Dillon Democrat.
And, they pushed back against complaints from members of their own caucus that the measure was negotiated behind closed doors and forced on the legislature.
“I strongly reject this notion that this was some sort of backroom deal,” said Sen. Chris Hansen, a Denver Democrat and one of the lead negotiators on the compromise. “This process has played out like hundreds of bills I’ve been a part of over the last eight years.”
Nonetheless, very little aside from the proposed deal survived the first day. Democratic-led committees Monday killed proposals from the left and from the right.
Rejected bills
In the House Finance Committee, bill sponsors were asked if their proposals would be acceptable to the conservative groups pushing the ballot measures — Colorado Concern and Advance Colorado — a sign of just how much leverage they had over the legislative process.
“We have no idea,” replied Rep. Lorena Garcia, an Adams County Democrat. “That’s one of the really amazing predicaments that we face as a legislature, when we are told to come in and hold House votes. But this is our opportunity to come in and do what we are elected to do, which is to do what we can for as many people as we can.”
House Bill 1005, sponsored by Garcia, would have increased a tax exemption for homes worth less than 70% of their county’s median residential property value, but offered less relief for higher valued homes. A legislative analysis found that homes worth less than $560,000 would see a tax cut under the measure in 2025, with higher valued homes seeing a tax increase.
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Similarly, House Bill 1004, sponsored by Rep. Chad Clifford, a Democrat from Centennial, would have cut taxes for homes worth less than $550,000, but raised them for higher valued ones.
The House Finance Committee rejected both proposals.
“Middle- and low-income families are struggling,” Garcia said. “They’re the ones who are feeling the pinch. If we are real and honest about wanting to provide effective property tax relief to those who need it the most, this is the way to do it.”
As if to underscore Garcia’s argument, nonpartisan legislative staff Monday released a new analysis of the tax cuts lawmakers approved in May when they passed Senate Bill 233 at the end of the regular legislative session. The report showed that over the next three years, a homeowner with a $2 million house would save $1,871 on their taxes. The average homeowner in Adams County with a home worth $570,000 would save around half of that.
Another progressive proposal, House Bill 1002, would have limited one of the tax breaks found in Senate Bill 233 to people’s primary residence, preventing people who own multiple houses from claiming the exemption on their second and subsequent homes. The measure, brought by Reps. Javier Mabrey and Steven Woodrow, both of Denver, would have increased local government property tax collections by $45 million next year. Landlords and short-term rental owners opposed the bill.
The 11-member House Appropriations Committee rejected it with just three Democrats voting in favor.
But while the progressive bills were killed Monday, expect some of their ideas to resurface Tuesday when the property tax debate moves to the House floor.
Republicans pushed unsuccessful tax cuts of their own. House Concurrent Resolution 1002, sponsored by Rep. Brandi Bradley of Littleton, would have asked voters to reinstate the Gallagher Amendment, a property tax-limiting measure that voters repealed in 2020. House Bill 1006, sponsored by Rep. Ken DeGraaf of Colorado Springs, would have increased the state’s property tax exemption for seniors by an average of $240 next year.
Three measures still alive
Not everything failed.
House Concurrent Resolution 1001 passed 8-3 out of the House Transportation, Housing and Local Government Committee. It would refer a constitutional amendment to the November ballot asking voters to enact new local controls on property taxes.
Here’s how it would work: if a ballot initiative limiting property tax revenues passes the statewide ballot, it would still have to be approved by voters within each local government before the limit applies to their jurisdiction.
The resolution needs the support of two-thirds of the members of each the House and Senate to make the ballot. It would then need the support of 55% of voters to pass.
House Bill 1007 also unanimously passed the House Transportation, Housing and Local Government Committee. It would offer a larger property tax break on homes that are accessible to people with physical disabilities.
It’s unclear if the passage of either of those bills would affect the ballot measure deal.
House Bill 1001, the measure carrying out the compromise to get the two property tax measures off the November ballot, passed the House Appropriations Committee by a 8-3 vote. The “no” votes came from Sirota, Rep. Elizabeth Velasco, D-Glenwood Springs, and Rep. Scott Bottoms, R-Colorado Springs.
The proposed deal builds on Senate Bill 233, a $1 billion tax cut passed near the end of the 2024 legislative session.
It would cut property taxes by an additional $255 million starting next tax year, for taxes owed in 2026, with additional assessment rate cuts for residents and some businesses phased in over the following years. Local tax rates vary greatly from one community to the next, but for the typical homeowner, the deal is expected to provide less than $100 in tax savings in the first year of the deal.
It also would strengthen the measure’s local cap on property taxes, limiting revenue growth to 10.5% over the two-year tax assessment cycle for local governments and special districts, with exceptions for new construction and things like rezonings, which can change how a property is taxed.
School district property tax collections would be limited to 12% growth statewide every two years.
The measure includes some reimbursement for fire protection districts and other local services that would lose money due to the cuts.
In exchange, Advance Colorado and Colorado Concern have promised to remove Initiatives 50 and 108 from the ballot and not pursue statewide property tax ballot measures in the coming years. To hold them to their promise — which isn’t legally enforceable — lawmakers have proposed language that would repeal the deal if the measures go forward.
Rep. Andrew Boesenecker, a Fort Collins Democrat on the committee, called the compromise “a very responsible solution to a very irresponsible proposition.” He said it would cost his home county, Larimer County, $4 million as opposed to a $22 million hit if Initiatives 50 and 108 passed.
Rep. Matt Soper, a Delta Republican on the panel, said the deal represented a “healthy compromise” between taxpayers and local governments.
But Sirota, the committee’s chair, was livid that representatives from Colorado Concern and Advance Colorado didn’t testify Monday.
“I don’t even see the people that we are supposed to be negotiating with here,” she said, lamenting the groups’ secret donors and how people with deep pockets have been able to affect state fiscal policy.
Michael Fields, the president of Advance Colorado, was at the Capitol on Monday. He was spotted talking with a member of Gov. Jared Polis’ staff outside of the Senate.
Representatives of several interest groups expressed anxiety about how the measure would affect their bottom lines or offer less relief to lower-income Coloradans. But most, when asked by the committee, said they still preferred the compromise measure over letting Initiatives 50 and 108 be on the ballot.
“I think the costs are too high to gamble with ballot measures that are this disastrous,” said Scott Wasserman, a lobbyist for the Bell Policy Center, a liberal fiscal policy think tank that he previously led.
Ann Terry, who leads the Special District Association of Colorado, said it was likely too late in the election cycle to mount a campaign to oppose the measures.
Fire chiefs raised the most concern about the compromise, saying it would threaten their ability to protect and serve their communities. Elizabeth Fire Protection District Department Chief TJ Steck said his department stands to lose $258,000 under the proposed deal.
“It’s not a lot,” he said. “But what that means to my community is that I would be eliminating one of my three ambulances with staffing. I don’t want to sound an alarm, but I’m going to sound it today. In five years, Colorado fire services, especially on the volunteer side, are going to be in dire straits. We’re going to have agencies that will not be opening their doors when people call.”
The chiefs asked for an exemption from the additional cuts. Their request wasn’t met before the bill advanced out of the House Appropriations Committee.