Colorado voters have a nasty ballot issue to decide this year, known as Proposition HH. Here’s the quick history:
Colorado voters passed a law called TABOR (Taxpayer Bill of Rights) in 1992, which limits Colorado Government expenditures annually based on inflation and population growth. Almost EVERY year since then when Democrats have held the governor’s office (and either chamber) they have worked hard to repeal it or pass exemptions/exceptions to grab the cash. Otherwise, we receive refunds.
In the last 3 years our property values have skyrocketed, some even doubling. That means our property taxes are exploding right before our eyes. There is an “easy button” which counties can do to solve this, but the Dems in the state government have (what they deem) is a better idea, and it directly involves TABOR cash (which remains the bane of their existence). Make no mistake: $400-$600/month property tax increases are real and facing many in this state right now. Something needs to happen.
So, let’s lay this Proposition HH out for us all to review. I have endured the painful task of trying to read this complete and utter complicated (steaming) mess of a bill, and here’s the take-aways:
- HH tries to limit property taxes to no higher than the rate of inflation … UNLESS overruled by the local government. It does not appear to do that for the current emergency, but instead for 2023 onward. Note our most recent valuation period was 2022, when the skyrocketing really kicked in.
- HH will drop property valuations using a very complex set of formulas, with rates effectively dropping by 6%. Actually, the actual formulas are far worse, for example: 6.7 PERCENT OF THE AMOUNT EQUAL TO THE ACTUAL VALUE OF THE OF THE PROPERTY MINUS THE LESSER OF FIFTY THOUSAND DOLLARS OR THE AMOUNT THAT CAUSES THE VALUATION FOR ASSESSMENT OF THE PROPERTY TO BE ONE THOUSAND DOLLARS. And that $50,000 is dropped to $40,000 from 2024 through the end of all of this, in 2033.
Oh – before I forget – this whole thing expires in 2033 … UNLESS … the state decides to continue keeping the TABOR money, which HH allows them to do without ANY further voter approval.
- HH wants to build a fund for all the excess revenues the state collects and then use it to reimburse counties for lost property tax revenues from the reductions that HH is proposing. What is does NOT do is fix the windfall they are set to receive in this new valuation explosion.
- How does the money distribution work: The state keeps excess revenues, and then will reimburse counties 100% of their lost revenues (from property tax reductions as part of HH) if their valuations went up by less than 10% and will reimburse counties 90% of their lost revenues if their valuations went up by over 10%. For as long as the slush fund lasts.
Confused yet? Any voter reading this bill should be – and will be. You need a big whiteboard and lots of yarn, tape, and sticky notes to follow the web they try to weave.
Let’s try to illustrate this with simple math:
You have a home worth $500,000. In the new valuation world, your valuation is now $700,000 (40% increase – not far off from the mean). You paid, let’s say, $5,000 in annual property taxes before, now you’ll pay $7,000. With me so far?
Under HH they will reduce your bill by 6%. Let’s just round that up to 10% for the heck of it. So instead of paying $7,000 in this new world, you’ll now pay $6,300. That’s still a 26% increase in property taxes to you – the property owner (or renter, as this trickles down).
And ALL THE WHILE that 40% tax increase is still being paid by you (26%) and the state (13%) – but the state is using your TABOR tax refund to pay their part of it! Following all of this? And your TABOR refund goes away – and here’s why: The state has usually short-changed counties on the money it sends them, leaving counties scrambling to make up the difference each year. This relieves the state of a lot of that burden, because, again, they’re keeping our refunds.
Issues to point out:
- The taxes from valuations are going up by 40% (on average). There is no talk of that at all in this bill. This bill is all about using TABOR to ease the hit.
- The bill sunsets in 10 years but can be continued at the will of the government with no voter input.
- This bill does nothing to relieve the increases we’ll all see in our property taxes even with the TABOR re-allocation. A lot of families are going to pay a steep price in what they can afford.
Remember I mentioned an easy button earlier? Here it is: Lower … the … mil…rates… Duh. If your valuations went up 15% in your county, lower the mils by 14%. The county still takes in more money, and owners aren’t crushed. Duh. I suspect that is “plan B” if HH fails – which it totally should if you aren’t a rich, carefree multi-millionaire (like our governor, actually).
My question going forward is really simple: Why wasn’t plan B put forth in the first place?
Voting matters, folks. Not just on HH – but also on WHO put this idea together.
