With rising property tax bills a cause of concern for many Coloradans, lawmakers and Gov. Jared Polis have struck a deal to offer property tax relief. The new property tax relief from Colorado comes just days before the end of the legislative session. If it becomes law, this new property relief will reduce the assessment rates for commercial property and valuations for homeowners.
What’s the new property tax relief from Colorado?
On Monday, Gov. Polis, lawmakers, and business group heads announced a deal on new property tax relief from Colorado. The property tax relief, Senate Bill 233, comes two just days before the end of Colorado’s 2024 legislative session, the minimum time required to turn a bill into law.
Lawmakers, Gov. Polis’ office and interest groups have been working through the weekend with Colorado Concern, a non-profit, to develop the agreement. Colorado Concern represents CEOs in the state and has been working on a plan to push lawmakers to come up with an even bigger property tax break.
According to Colorado Concern, it is continuing to work with lawmakers on Senate Bill 233 and, in the meantime, will continue to push for bigger tax relief.
“This agreement can’t please everybody in the world but the fact that you have such strong agreement between Republicans and Democrats, liberals and conservatives, that this addresses the underlying issue,” Gov. Polis said, praising the bill sponsors.
Under the new property tax relief bill, the commercial tax rate would be reduced to 25% (from 29%) over three years, while there would be two residential rates – 7.15% for schools and 6.95% for other local governments.
The relief bill will also allow homeowners to deduct 10% up to $70,000 of their home’s value for taxation purposes. Additionally, the relief bill caps the rise in property tax revenue at 5.5%, but it exempts schools, home-rule cities and any debt by special districts from the cap.
Those in favor of the new property tax relief from Colorado say that it will offer immediate financial relief, boost economic growth, and stabilize local communities.
Where will the money come from?
In its first year, the new property tax relief from Colorado is estimated to reduce taxes by $1.3 billion, which advocates refer to as the biggest property tax reduction in 20 years. More importantly, the tax relief won’t dent the state budget and won’t lead to a new debt to K-12 education as well.
It is, however, unclear how the full tax cuts will be paid for. Some portion of the tax cuts will be sponsored by the state education fund, while some will come from the general fund dollars. Still, lawmakers will have to return to the discussion table to find the remaining funds for the tax cuts.
Colorado’s legislative session ends Wednesday, so lawmakers have little time to approve the relief measure. The chances of the bill becoming a law are solid, considering the measure enjoys bipartisan support.
