Less than a week before Thanksgiving, the first day of the Colorado General Assembly’s special legislative session on property taxes kicked off with competing partisan proposals and little sign of bipartisan collaboration, and within hours several Republican measures were already dead.
“Our conversations with (Democratic) leadership have been sparse,” Republican House Minority Leader Rep. Mike Lynch said Friday morning ahead of the opening gavel. “They've been more of a presentation of what their plan was, instead of a collaboration with creating that plan.”
More than a dozen bills were introduced between the state Senate and House of Representatives Friday morning, marking a variety of proposals from both Republicans and Democrats intended to blunt the impacts of next year’s spike in property taxes. Both parties have openly criticized each others’ proposals.
"They have created their hard lines in the sand," Senate President Steve Fenberg, a Democrat, said. "So we were having conversations, but at the end of the day, they are demanding that we raid the reserves to pay for all of this. We have communicated that that is a very, very challenging thing for us in our caucuses to contemplate."
After introduction, the bills moved to their first hearings in front of several legislative committees. The session will last a minimum of three days, but hopes for a speedy process dimmed as party leadership in the Senate publicly clashed over the schedule within hours.
“I don't think it's a spirit of collaboration to say that Republican proposals aren't real. They're real,” Senate GOP Assistant Minority Leader Bob Gardner said. “My constituents want something there’s collaboration on."
Gardner and Senate Minority Leader Paul Lundeen claimed the special session’s schedule is too rushed to ensure legislation is properly crafted and debated with robust public engagement. They also said Republicans were not given enough time to review the Democrat-backed bills thoroughly because they didn’t get copies of the bills until Thursday.
“The way we got here is that people didn’t take the time,” Gardner said.
Fenberg accused them of undermining the process and reneging on the agreed-upon schedule.
“Going back on things that were already discussed openly, in the spirit of collaboration, to me is a slap in the face,” Fenberg told Lundeen and Gardner on the Senate floor. “Frankly, it is telling the public the opposite of what we already discussed openly and publicly.”
After a heated discussion, they agreed to stick to the schedule, for now, and move forward with committee hearings.
Democrats hold a super-majority in the legislature and the governor’s office, so they don’t need GOP support to pass legislation, but Republicans could raise more objections and hamper the legislative process. On top of that, lawmakers have to pass a plan by early December, when local governments set their tax rates for the year.
Gov. Jared Polis called lawmakers back to the State Capitol to come up with a short-term property tax relief plan ahead of next year’s spike in property taxes after ballot measure Proposition HH was overwhelmingly rejected by voters earlier this month. The initiative included a tax relief plan crafted by Democratic state lawmakers and backed by Polis himself.
Now, Democrats’ proposal is centered around a bill that would provide some of the same relief for next year that was proposed in Proposition HH. Unlike the ballot measure, though, it would not include tax relief for commercial properties. It also refrains from using excess tax revenue that’s refunded to taxpayers under the Taxpayers Bill of Rights, or TABOR, to cover losses in revenue - something Republicans oppose.
The bill would reduce property value assessment rates for residential properties from 6.765% to 6.7% and would allow owners to exempt up to $50,000 from their property’s value altogether. It would also backfill lost revenue for schools and local governments using $200 million in the general fund set aside for tax relief.
Democrats are also urging local governments to do what they can to ease tax burdens.
"It is our hope that every local government in the state takes a look at their budgets and grapples with these tough questions for themselves, because only they know what their expenses are and how to prioritize their needs against the taxes being paid by those locals," Democratic Rep. Chris DeGruy-Kennedy said. "We just want to continue emphasizing that property tax is first and foremost a local government issue and we hope that they take that very seriously."
The Colorado Municipal League and Colorado Counties Incorporated, which represent the state’s town and county governments respectively, remain neutral on the Democrat-backed proposal so far, but testified Friday in favor of sufficient backfill for any losses they experience in tax revenue.
Another bill from Democrats would cut into TABOR refund money, but not to backfill tax revenue shortfalls. Instead, it would use the funds to expand how much the state can offer under the Earned Income Tax Credit, with the intention of keeping more money in Coloradans’ pockets. The expansion will be focused on lower-income families.
Other Democrat-sponsored bills would make TABOR refunds the same amount for all taxpayers as opposed to using a tiered income-based system as well as expand emergency support for renters and increase government food assistance. They also want to create an eleven-member task force to come up with additional efforts for long-term solutions to climbing property taxes. Six of the members would be lawmakers, while the others would include local government and school board representatives. The group would have to meet by June.
Much of the minority party’s proposal, including its flagship tax relief bill, has already been killed.
The main Republican bill would have limited both residential and commercial property value assessment rates. Commercial assessments would be capped at 25% and residential rates would be capped at 6.5 percent. It would also have allowed commercial property owners to exempt up to $60,000 of their property value. Residential owners would be able to exempt up to $80,000.
The proposal also avoided touching TABOR refunds, and would instead use the state’s reserves and general fund to backfill tax losses and shore up local government revenue for the next year. Democrats opposed using the reserves, which historically have been kept intact.
The bill was rejected by a legislative committee Friday afternoon. Other Republican measures have also been killed in committee. They would have launched another task force, delayed deadlines for property value assessments and launched a study around property tax reductions.
