The saving grace of Senate Bill 23B-00 2023 Property Tax Relief, coming out of the special Legislative session, is that it buys a year’s time to get this legislation right for the Southwest. This is welcome news. And it tees up property tax relief, along with the quandaries this brings, as a focal point for the 2024 General Assembly.
Still, the measure doesn’t address La Plata County’s situation. Within state-set margins, La Plata is an outlier with its population of less than 300,000 but with property value growth at 20%.
This brings us back to the same drawing board as Proposition HH. “Backfill” for local districts could mean “no fill.” Similar situation but, now, even less revenue coming in. We need a reasonable solution as we return to our common mantra: Property taxes are a local issue.
Key provisions from the bill with our comments:
· A $55,000 exemption on residential properties only, up from $50,000 as introduced. Property owners will see some savings but nothing dramatic. A homeowner with a house valued at $500,000 might save a couple hundred dollars and one worth $5 million might save about $500. But if property values continue meteoric rises, this will cancel out. For now, we’ll score it as a win for homeowners wanting some savings.
· A slightly lower current statewide assessment rate, which determines how the remaining value will be taxed, from 6.765% to 6.7%. Staff in county assessors’ offices will have more work and, likely, more headaches. Be nice to them.
· K-12 education will receive full backfill, as required by law, bringing this up to the revenue that districts would have received under old property tax rates. That’s a relief but doesn’t detract from the fact that we need a durable, lasting plan to fund schools.
· Again, the backfill concern. The maximum of $54 million for local governments doesn’t tell us all we need to know as this point in time. Your crystal ball may be as good as ours.
A bright spot in the session was the passing of House Bill 23B-1003 that creates a 19-member task force to study and develop “permanent and sustainable” property tax plans for consideration. Important to outcome – and much appreciated – is its variety of members with more political viewpoints from different parts of the state. Legislators, local elected officials – including county commissioners – an assessor and members representing education, firefighting and business interests will have a voice. Diverse interests at the table always makes good sense.
They’ll meet often, too – twice a month – until March 2024 to get something tangible done. Expect legislation for the General Assembly to examine or a measure for the 2024 ballot.
We look forward to what the task force brings, especially with the looming, draconian Initiative 50 on the 2024 ballot as a state constitutional amendment. A “yes” vote would support limiting property tax revenue to 4% growth above total statewide revenue collected from the previous year. It would then require voter approval to allow local governments to retain revenue above the cap.
(Expect a loud “no” from our editorial board on this one because not a whole lot would be funded. Plus, we don’t favor a state constitutional amendment dictating local government.)
Other policy reforms passed we’re glad to see include Senate Bill 23B-3, with an equal $800 in Taxpayer’s Bill of Rights refunds to all filers next year. Especially good news for lower-income Coloradans along with House Bill 23B-1002, which doubled the state’s earned income tax credit from 25% of the federal benefit amount for those who qualify to 50% next year. Largely benefiting low-income working families – one more needed break.
In our predicament, we return to our strong belief in property tax decisions made locally. For inspiration, we look to Bayfield with 71% of voters approving an extended property tax to fund a new fire station and urgent care clinic. Upper Pine River Fire Protection District Fire Chief Bruce Evans and supporters beat the streets to get this passed.
This is what we want – property tax choices made locally. Hopefully, that task force in the gold-domed Capitol will hear and represent us well, all the way from the Four Corners.