Theof the state legislature has turned the Capitol into a pressure cooker as Democrats and Republicans debate how much relief the state can and should provide.
The state budget is about $40 billion. The bill Democrats have introduced cuts property taxes by about $400 million.
"Instead of really thinking about and putting people first, putting Coloradans first, we put government first, we're backfilling local governments, we're backfilling... you know... we're making sure state government, " says Republican Sen. Barb Kirkmeyer, who sits on the Joint Budget Committee. She says local governments will see property taxes grow by $4 billion next year and can afford a bigger cut.
Democrats' plan calls for essentially the same relief as Proposition HH did. The average homeowner would save about $240 yearly on a $500,000 home.
Fire, ambulance, and hospital districts would be fully reimbursed for lost revenue, along with schools and some smaller local governments that haven't seen big increases in property values.
"We have to stay within the confines of what we budgeted, we budgeted $200 million for this purpose and so we're going to have to stick to what we budgeted," says Democratic Sen. Rachael Zenzinger, who also sits on the Joint Budget Committee. She says Democrats are stretching state dollars as far as they can.
While Republicans have pushed for more significant relief, using the state reserve to backfill local governments, Zenzinger says it would be a mistake.
"The point of a state reserve is an order to protect the state budget so that it can function in case of a downturn," she said. "Our current reserves are not as sufficient in order to be able to ride the waves of an economic recession or downturn."
The state reserve has about $2.2 billion right now and Zenzinger says, during COVID, the state had to cut $3.3 billion.
"All of our forecasters have said, 'a recession is coming'... we're already seeing a softening of the economy. We... need to be mindful of that... we have to make sure we live within our means," she said.
Kirkmeyer says lawmakers can replenish the state reserve next year.
"Office of State Planning and Budgeting said there's a 30% chance or less that we're going to have a recession, we've got record... healthy, fun balances throughout this state whether it's in education or in other departments throughout the state... it's there. Instead of thinking about 'how do we cut government?' we've been thinking about, 'how we grow government?'" she said. "This state does not have a revenue problem, this state through the legislature and the governor have a prioritization problem."
In addition to property tax relief, Democrats are also using the special session to provide tax relief to lower income Coloradans who may not own property.
The House passed a bill expanding the earned income tax credit by $185 million, which would reduce TABOR refunds, and another bill that doles out TABOR refunds equally. It also gave initial approval to a bill that provides $30 million to help renters.
Meanwhile, the Senate debated a property tax law passed last year. It uses TABOR refunds to backfill local governments. A conservative group has threatened to challenge the law in court. Democrats amended their current property tax bill to require local governments to reimburse them if the state loses the legal challenge.
Republicans countered with a measure that would have tapped the state reserve instead of TABOR refunds for the backfill, but it failed along with their other bills.
They were able to win a slight increase in property tax relief in the democratic bill and convinced Democrats to extend the special session until Monday to give Coloradans more time to weigh in on all the changes.
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