It’s no secret that the American dream of owning a home or starting a business is unattainable for the average Coloradan. Every day, we hear from our constituents about the record-breaking housing and property costs squeezing them out of the market, and in some cases, the state. In fact, Colorado’s real estate value last year skyrocketed to $1.2 trillion, according to a study by Zillow.
The cost of living in Colorado has emerged as the state’s No. 1 challenge.
What isn’t talked about enough, however, is that these skyrocketing home values result in enormous increases in property taxes, which have far-reaching implications for families, small businesses, younger workers, seniors on a fixed income, and people in gentrifying neighborhoods.
If property values continue on this trajectory, homeowners and businesses — already burdened with higher costs due to inflation — will face dramatic increases in property taxes. Renters, who are already paying substantial monthly leases, will also feel the crush as property owners try to pass on some, if not all, of their larger tax bills by raising the rent.
Coloradans need an immediate, thoughtful and bipartisan solution. That is why we are sponsoring a ballot measure that slows the rate of growth of assessment values that drive property taxes to 3% or inflation, whichever is less. If the property is sold, improved substantially or given a change of use, the property’s assessed value is reset using the most recent sale price or reappraisal.
By limiting value increases that determine tax bills to 3% a year, local tax bases that fund schools, fire districts and counties will still continue to grow at a predictable and steady rate. If and when local districts need additional revenues for specific purposes, this measure specifically reiterates the authority of local districts to go to local voters to ask for mill levy overrides to fund those needs. This framework balances the needs of local communities that depend on tax revenue to fund essential services with relief for taxpayers facing skyrocketing property tax bills.
To be clear: This is not a property tax cut. And, unlike California’s troubled Proposition 13, our measure does not impose new directives or mandates on mill levies, roll back assessed values or mandate a cap on property taxes.
Instead, our measure simply limits the pace of growth on assessment values that determine property taxes. It also avoids the mistakes of the Gallagher Amendment, which created winners and losers and was, above all, too complicated and too inflexible to work in a state that’s rural, suburban, and urban.
While avoiding wild swings in property taxes, our measure will never cut funding to schools or firefighters. Not a single dime. Not a single time. But it will put a stop to unaffordable and regressive property tax hikes that working families and small businesses just can’t afford.
The stakes of our ballot measure are real. Coloradans are facing an unprecedented and long-lasting tax hit. Beginning this year, the increase in valuations for the average homeowner will jump more than 20%.
Over the next four years, home values are set to increase an average of 30% statewide, while rental properties will soar by more than 34% and commercial and industrial properties will increase by at least 15%, according to a recent report by Colorado Concern.
If nothing is done, property taxes on families could double in only three to four years, and the property taxes businesses pay could double in seven to eight years.
This is not sustainable. For a state already mired in an affordable housing crisis, this property tax increase will make it harder for first-time homeowners to break into the market and for seniors to remain in their homes. A tax increase of this magnitude will accelerate gentrification and redevelopment as lower- and middle-income homeowners of all ages are pushed out of their neighborhoods when their taxes eat up greater shares of their income.
We ask that you support a commonsense, bipartisan solution to the problem of skyrocketing property values that threaten to cripple property owners and renters across the state.
Colorado state Rep. Alex Valdez is a Democrat from Denver and Rep. Colin Larson is a Republican from Jefferson County.
