The Colorado Legislature is not typically in session at the Capitol in late August; yet that’s exactly where we found ourselves. As a result of our special late-summer session, even more property tax relief is coming to every Colorado homeowner and small businesses across the state. And, hopefully, it also marks the end to the years-long property tax battles that have embroiled lawmakers, the Governor, outside political and policy groups, the entities that provide the many crucial services we all rely on every day, and most importantly, you, the taxpayer.
How’d we get here?
Back in 2020, Colorado voters repealed the Gallagher Amendment, a 30 year-old constitutional provision that determined the assessment rate of residential and commercial property which was not keeping up with the demands of our modern economy, especially in rural parts of the state. With the repeal, the legislature was given four years to come up with a new system. Then, of course, COVID-19 and Colorado’s overall popularity caused home values – especially in our mountain towns – to spike and property taxes bills went up with those increased values.
After several temporary measures to lower assessment rates, in May the legislature found a long-term solution when we passed the bipartisan SB24-233, which established permanent reduced assessment rates for residential and commercial property, greater initial reductions for homeowners, and financial certainty for the entities that rely on property taxes to operate and provide services like our schools, fire departments, hospitals, and local governments. SB24-233, passed with the support of 92 out of 100 legislators, reduced taxes by more than $1.3 billion per year and protected Coloradans from large spikes in the cost of property taxes while building in necessary safeguards to protect local services.
We thought that the broadly-supported, bipartisan, and significantly impactful bill was a long-term solution when we adjourned our regular session in May. Yet, even after this effort, well-funded special interest groups quickly paid significant amounts of money to gather signatures for ballot initiatives that, if passed, would decimate schools, fire departments and would slash local budgets for law enforcement, local services and much more, all while blowing a hole in the state budget that would have meant devastating consequences for our schools, roads, health care, and more.
These groups were ready to spend a significant amount of money to get these measures passed, but over the last few months leaders of those groups came to the table with the legislature and the Governor’s Office to seek a better way forward. That effort led to August’s special session.
During our four-day special session, we passed HB24B-1001, which adds an additional $255 million in tax cuts for homeowners and business owners. Because of this bill, Coloradans will see even-further reduced assessment rates and lower revenue caps. All residential property will move from 6.4% to 6.25% and from 7.15% to 7.05% for the school assessment rate, and if statewide value growth exceeds 5% from 2024 to 2025 the residential rate will be lowered even further to 6.15%. For commercial and other nonresidential properties, assessment rates are moving from 29% to 25% over the next two years. Tax bills vary greatly based on where someone lives and what their home is worth, so exact savings can be difficult to calculate. However, estimates predict that HB24B-1001 will lower property taxes for the average homeowner by about $62 in 2025 compared to current law and $179 in 2026. That means with both SB24-233 and HB24B-1001 in effect, the typical homeowner in our mountain counties can expect to see their property taxes reduced by about $368 in 2026 for a home valued at $800,000.
I would be remiss if I did not add my hesitancy about this process, however. It is important to note that property taxes are local taxes – the state does not collect this money. Rather, it stays in your communities and funds services that you, your family, your business, and your neighbors rely on every single day. It pays the teachers who educate our kids, funds the fire and EMS departments that respond when we need them, maintains the county and city roads you need to get to work, funds the law enforcement that keeps us safe, and so much more. While I believe avoiding the disastrous consequences Initiative 50 and Proposition 108 would have borne on these services was the responsible thing to do, I know we have more work to do to support our crucial services and I look forward to leading that effort.
Finally, after several years of efforts, and several regular and special sessions of the legislature, meaningful, long-term, and stable property tax savings are heading your way, Colorado.
I am already working to prepare for the 2025 legislative session, and welcome your ideas, concerns, and questions. As always, you can contact me directly at [email protected] or 970-846-3054.
By SEN. DYLAN ROBERTS
Dylan Roberts is the State Senator for Clear Creek, Eagle, Garfield, Gilpin, Grand, Jackson,
Moffat, Rio Blanco, Routt and Summit Counties