DENVER–The Senate State, Veterans, and Military Affairs Committee on Thursday voted along party lines to kill a bill that would have doubled Colorado’s senior homestead exemption.
Senate Bill 22-093 by Senator Larry Liston (R-Colorado Springs) aimed to expand the existing property tax exemption for qualifying seniors and veterans with disabilities’ primary residence from $200,000 to $400,000. If adopted, it also would have expanded qualification for the exemption.
Proponents of the bill argued that rising home prices justify the bill’s increased exemption amount.
Steve Schleiker, the El Paso County Assessor, testified before the committee, saying, “The median list price of homes in El Paso County is trending up 16.6% year over year.”
According to Zillow housing data, Denver home values averaged approximately $217,000 at the time voters passed the exemption and set the current $200,000 cap. Today, Zillow reports the average home in Denver costs $588,000.
Sharp rises in property value can force seniors on fixed income to sell their homes due to the resulting increase in property taxes. As reported by Colorado Politics, a recent report warns of an average of 20 percent hikes in property taxes over the next four years.
The bill would have saved seniors and veterans approximately $90 million dollars in the first year and nearly $100 annually thereafter, according to Legislative Council Staff estimates.
In what political insiders have deemed the Senate leadership’s “kill committee,” however, a Democrat majority voted three-to-two to postpone consideration of the bill indefinitely. The move prevents the full Senate from ever deliberating over or voting on the measure, effectively killing the bill.
The two Republicans on the committee urged their colleagues to at least refer the bill to the Appropriations Committee, which has proper jurisdiction over legislation containing tax expenditures. They lost the vote on the motion.
Colorado voters adopted the homestead exemption for senior citizens in November of 2000 with Referendum A. In 2006, Referendum E extended the exemption to one-hundred percent disabled veterans.
The measure exempts qualified seniors and veterans from tax on half of a home’s value, though the exemption only applied to the first $200,000 in property value. That means a senior living in a home assessed at $300,000 would pay half of the normal tax liability on the first $200,000 in value and the full amount of tax on the remaining $100,000.
Under the proposed bill, the homestead exemption would have applied to the entire value of a home up to $400,000 if owned and occupied by a qualified senior or disabled veteran.
The bill also would have amended the original statute by allowing those who qualified for the exemption to retain their qualification if they moved to a new residence out of medical necessity.
Under current law, an individual must maintain primary residency in a home for ten years to qualify for the benefit. Moving for any reason resets the ten-year waiting period.
Democrat members of the committee expressed concern over the issue of affordable housing in Colorado but did not see this bill as the solution. They argued that the bill targeted too narrow an audience to meaningfully tackle the larger problem of affordability. They further justified their vote to kill the bill by citing a need to focus on more demanding state priorities.
