COLORADO SPRINGS — A ballot measure designed to lower property taxes moves closer to a statewide vote.
Colorado Rising State Action turned in over 190,000 signatures to the Secretary of State’s office on Monday.
"What's been happening over the last few years is a huge rise in home values, the assessment rates that people got are a lot higher than they used to be. Our houses are worth more, but that doesn't mean you have more money in your pocket to be able to pay for the property taxes. Seeing the strain this could put on seniors and people on fixed incomes, we wanted to make a move to lower property taxes," said Michael Fields, Executive Director of Colorado Rising State Action.
Under Initiative 27, residential property taxes would drop to 6.95 percent from 7.15 percent, and non-residential property tax rates would drop to 26.4 percent from 29 percent. It would also allow the state to retain and spend $25 million for the homestead exemption, a property tax break for seniors and disabled veterans.
"Most years, we fund that but some years we don't. We wanted to give them an incentive. That whole thing is $150 million so this is only $25 million that the legislation could keep instead and spend on Homestead which would help those disabled veterans and seniors," said Fields. "The government will have more money next year than this year because of the high assessment rates. If values go up more than ten percent which might happen, nine percent means the government gets more but it slows the growth."
In Last November's election, voters repealed the Gallagher Amendment which was a state law that typically lowered property tax assessment rates to maintain a 45-55 split of the property tax base between residential and non-residential.
"What Gallagher did was balance commercial and residential assessment. Commercial property rates were going up at the time, but residential was going up double if not triple the pace of the commercial property. So what Gallagher did was bring these into balance with the assessment rates. We don't want residential assessment rates to go up higher than the commercial," said Glen Weinberg, Fairview Commercial Lending. "Amendment B basically came in and said we are getting rid of the Gallagher so now we are going to fix the assessment rate."
During the last assessments, Weinberg says El Paso County home values went up anywhere between 15 and 30 percent.
"Values are already up 20 percent for the next assessment rate. Assessments happen every odd year so the values you're seeing now are from 2018 to 2020. In 2023, you're going to have another increase from 20 to 30 percent. So why are property taxes going up? Values are going up and Amendment B was passed and got rid of Gallagher," said Weinberg.
The Colorado General Assembly passed a law this year in response to Initiative 27, it puts various temporary assessment rate reductions in place for two years, depending on what voters decide.
"The ballot measure says taxes should be reduced a $1 billion dollars but it's only going to be $200 million dollars because of what the legislature did," said Elliot Goldbaum, Colorado Fiscal Institute.
Goldbaum believes the ballot measure has several unintended consequences and doesn't target relief to the people who need it most.
"There is a potential for school districts to see funds reduced, especially in areas of the state that haven't see dramatic increases in property values. If you are a renter, you aren't going to get any tax cuts from this. The only people who are going to get a tax cut from this are those who own property which is about 40 percent of the state. It is not a significant number of people, but at the same time there are a lot of millionaires and billionaires who own very expensive property who are going to get a very large tax cut," said Goldbaum.
He says the ballot language is very deceptive, and the Colorado Fiscal Institute sued to get it changed.
"The property tax benefit that is already in the constitution gets funded every year, regardless if this gets passed or not. I think it is deceptive that this was put into the ballot measure language, and we actually sued to get it taken out of the ballot measure language. We were unsuccessful, but we will be letting all of the voters know that voting for this doesn't do anything to make sure older Coloradans and disabled veterans get that property tax benefit," said Goldbaum.
According to the fiscal note, $100 million of public education funding would be impacted by Initiative 27.
"In March, the Colorado Education Association took a stance to oppose Initiative 27," said Kevin Vick, Vice President, Colorado Education Association. "The state of Colorado is already underfunded our schools by this year it's going to be $572 million. Over the last ten years, it's been about $10 billion altogether. We are already short-funded, and cutting our revenue any further is going to kneecap our kid's futures."
Vick says property taxes are one of the main sources of public education funding.
"The state then has a balancing act with the revenue that comes in from the local taxes, but the state doesn't have the resources to be able to fill the gap if those property taxes get cut. It will result in an overall lowering of revenue," said Vick.
He says education won't be the only area impacted if the measure passes.
"In addition to schools, you would see police and fire protection be diminished, you would see local mental health services continue to suffer," said Vick.
Despite concerns, proponents of the measure say it's the right time for change.
"The government is not the entity that is struggling right now. It's individuals, families and businesses are and this break will help them," said Fields.