Initiative 27 was recently approved to appear on this November’s statewide ballot. This measure would cut property taxes by 9%, while also allowing the state to keep an extra $25 million per year to help fund the Homestead Tax Exemption for seniors and disabled veterans.
As you can imagine, Coloradans were eager to sign this petition (we turned in over 190,000 signatures) given how much home values have been skyrocketing in recent years. Just a few months ago, property owners received their new property assessment – which will be used to calculate their property taxes for the next two years. For much of the state, there was sticker shock. Some values went up as much as 20%. The average increase was in the double-digits.
The problem with this is just because the value of your home goes up doesn’t mean you have more money in your pocket to pay the extra taxes. When this happens year after year, eventually, people start getting taxed out of their homes. Seniors and people on fixed incomes are especially vulnerable. But it also impacts people who rent. If property taxes go up, the increase get passed on to renters.
The increase in property values also means that even if Initiative 27 passes, government will still get more money next year than it has this year. School districts, fire departments, and other local services will still see their budgets grow.
We are also at a point in time when government is simply overflowing with money. Over $12 billion of federal stimulus money has gone to Colorado’s state and local governments. Our state budget is back over $34 billion – and we are projected to get $2.2 billion in TABOR refunds because the state budget is so flush with money. One state senator even said, “(The state) had too much money…We cannot be good stewards of money because there’s too much of it.”
This means that now is the perfect time to give families and small businesses a property tax break. For decades, Colorado’s businesses have paid property tax rates much higher than the surrounding states. Currently, our state has the 35th-worst unemployment rate. If we want our small businesses to build back stronger after COVID, we cannot continue to put them at a disadvantage.
As you can imagine, not everyone is supportive of Initiative 27. State Sen. Chris Hansen recently said, “It’s very easy to offer people free money and offer them an unrealistic free ride. But there is no free ride here.” Senator Hansen must have accidentally said the quiet part out loud. He, along with many of his legislative colleagues, believe that even slowing the growth of government is a “free ride.” Someone ought to tell him that government works for the people, not the other way around.
Even if Initiative 27 passes, however, our property tax system will still need long-term reforms. We need a cap on how much property taxes can increase each year. And we need regional assessment rates instead of the one-size-fits-all approach we have now. Hopefully, a bipartisan group of legislators will come together to get these done. But in the meantime, Coloradans deserve this 9% property tax cut.
Michael Fields is the executive director of Colorado Rising State Action and a proponent of Initiative 27.
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