State commission calls for big rewrite of Colorado's property tax relief bill
Just days after a massive property tax relief bill was unveiled at the state capitol, the fate of some of its key provisions is in question.
The bill is the product of four months of hearings by the state Property Tax Commission, which is made up of state and local leaders.
It met for the last time Friday and some members called for a major re-write of the 83-page bill, with less than two weeks left in the legislative session.
The current bill draft allows homeowners to exempt ten percent of their homes value -- up to $75,000 -- from taxation and defer any increases in property taxes until they sell their homes. It also lowers the commercial assessment to 25.5% over 5 years.
It would fully backfill education and partially backfill special districts like fire and ambulance. But other local governments would get no backfill after three years.
Some commissioners now say a better plan would be to simply cap growth in property tax revenue at 6 percent for all local government, with no backfill.
"I think this idea of applying some sort of reasonable cap in lieu of deep, deep cuts that require some sort of backfill is a pretty reasonable concept to explore for us where it means that we will not be imposing from the state level deeper cuts onto the local governments moving into the future but we will put in place a growth cap that restrains that future growth," said state Rep. Chris deGruy Kennedy.
But state Sen. Chris Hansen argues a cap would mostly benefit wealthy homeowners and is simply too risky.
"One of the big downsides of caps is they don't adjust for inflation so if you have a high inflation year you suddenly get divergence between how much is assessed value and how much is actual value. That's been the huge problem in California, and I want to make sure Colorado doesn't repeat that mistake," he said.
In addition to the cap, some commissioners called for extending the tax relief in effect this year into next year.
State economists say that would mean a reduction of more than a billion dollars in property tax revenue for local governments. Hansen says the state only has about $350-$400 million to backfill the lost revenue so, he says, schools would take a hit.
The legislative session ends May 8.
