Property tax policy is not sexy. The method of calculation is also complicated. I won’t even pretend to be to be an expert, or even an eager follower of the topic. We should all be paying more attention this year, however, because a big property tax jump is coming. This doesn’t just mean for homeowners either; if you rent, remember that costs to the landlord often pass through to renters. At your next lease renewal, you’re going to feel the change too.
By nature, I’m more of a light a candle than curse the darkness type, so I want to talk over what you can do about it, but first let me back up and define the problem.
Your property taxes are, as is fitting of any government process, complicated. Your county assessor fixes a market value on your home, the legislature fixes how much of that value is taxable, and then the local governments empowered to levy taxes on you fix how much tax you’ll pay.
Let’s do a sample for my pretend house out in Logan County: My house is worth a nice round $100,000 according to the assessor. Under current law, 6.95% of that value is taxable. That is, I’ll owe property taxes on $6950. In my corner of Logan County, the mill rate (property tax rate) is about 85 mills, that is, 85 thousandths or 0.085%. So, my tax bill will be 0.085% of $6950 or $590.75.
So far so good, I hope. The looming problem we face has many facets. The first is our state’s ballooning property values: property is assessed every odd year, and so my house which used to be worth $100K has now, thanks to inflation, jumped to $175K (a mild increase compared to some I’ve seen). That would make my property tax go to $1033.81, close to double what I owed before.
It gets worse though. In order to kneecap a citizens’ initiative that would have lowered the property tax rate permanently, the legislature in 2021 passed, and Gov. Polis signed, Senate Bill 293 to temporarily lower the residential property tax assessment rate from 7.15% to 6.95% (unless you live in a multifamily dwelling, then you got a bigger break). That lower rate ends in property tax year 2023. So in my example above, my already-increased tax bill will jump up from $1033.81 to $1063.56. So much for a focus on affordability. Maybe it was just a focus prior to the 2022 election.
Lastly, in the past we would normally have had some protection against jumps like these, but Coloradans have not been thoughtful in their voting choices. Many have voted away local protections under the Taxpayer’s Bill of Rights (TABOR), waived the 5.5% revenue cap, and, statewide, voted down the Gallagher amendment. You could argue the wiseness of the choices at the time, but without these protections now, we have little in the way of options to put the brakes on runaway increases.
So, time to light a candle. There are a few things to be done about this and I would organize them as either near-term or long-term.
In the near-term, there are a couple of bills I have heard about this legislative session. The first is House Bill 1054, sponsored by Rep. Lisa Frizell and Sen. Byron Pelton, both Republicans. The bill both puts a freeze on assessment of property for a couple years and puts a limit on the increase in value. The idea being, according to the sponsors, to give everyone, homeowner, business owner, and landlord alike, a bit of breathing room while policymakers in Colorado figure out what to do about the ballooning tax bills.
The second, also sponsored by Sen. Pelton (though in the draft stages) would create a commission of local government officials to review what to do now that the Gallagher amendment is not altering the residential assessment rate to keep property tax bills low. Think of it as a way to help county governments figure out how to get enough revenue to do what they need to without soaking taxpayers. You can watch Senator Pelton’s page or my own substack for updates.
In the longer-term, I would recommend you start to follow your local tax policy more closely. There used to be a time when property taxes were subject to TABOR limits and thus a huge jump in revenue caused by rampant inflation in housing values would have kicked in a TABOR rebate. There also used to be a time when an authority that could levy property taxes had to hold to the 5.5% rule (their total revenue, not the tax bill of one single individual, could not increase more than 5.5% over the last tax cycle).
These restrictions are an example of “you don’t know what you got til it’s gone” because many, but not all, counties asked their residents, who in turn gladly voted away their TABOR protections and waived the 5.5% rule. Want to know where your county sits? Contact your county commissioner or check the “Tracking TABOR Table” and list of “De-TABORed” counties on the Colorado Counties Inc. website , then go look at the Department of Local Affairs’ page about the 5.5% Tax Revenue Limit along with its list of taxing entities and whether or not the 5.5% rule has been waived.
If voters in your county, town, or other taxing authorities have given away their TABOR and 5.5% protections, you should work to reclaim them; maybe it made sense at the time to vote them away, but almost every county that De-TABORed has gone far past the original 4-year sunset provision on relinquishing TABOR rights. Let’s revisit that now in light of current economic conditions. Go talk to your elected officials and tell them you want your TABOR and 5.5% Revenue Limit back. Better yet, get a group of people in your district together and start a campaign. Lastly, I’m researching now whether and/or how individual citizens could launch a “Re-TABORing” local initiative. I will update to my substack as I have information, so be watching if this is a subject you’re passionate about.
Cory Gaines lives in Sterling on Colorado’s Eastern Plains.
