DENVER — Just as a special session convenes to discuss what property tax reform state lawmakers are willing to offer in the wake of Proposition HH’s defeat, Republicans are already seeing conflict within the ranks over details, especially concerning the notion of ‘backfilling’ local governments.
On Wednesday, Colorado GOP Chairman Dave Williams issued a news release accusing fellow Republicans of plotting “bait-and-switch schemes,” and vowing to notify its members of any Republican who votes to “grow government and be fiscally irresponsible.”
“What’s unexpected is learning how some Republican lawmakers want to bail out governments who aren’t losing revenue instead of solely making taxpayers whole and protecting them from losing their homes,” Williams said in his release. “The Colorado Republican Party will oppose any measure that attempts to backfill or “buffer” local governments with taxpayer dollars, whether from General Fund Reserves or TABOR Surplus.”
Yet, just one year ago, both then-state Rep. Williams, and then Rep. Kevin Van Winkle — whose Senate bill Williams is calling on fellow Republicans to support — were firmly on the same side as nearly every other Republican when they voted in favor of and signed on as co-sponsors to a bill backfilling local governments under the same exact scenario for property tax years 2023 and 2024. That bill was sponsored by fellow Douglas County Republican Patrick Neville.
Most notable, however, is that according to the fiscal note on the Williams/Van Winkle supported SB-238, the first $240 million of the backfill is paid for by raiding TABOR refunds, with any additional needs being paid from the General Fund.
During the 2022 session, Senate Bill 238 was passed on a vote of 33-0 in the Senate and 56-4 in the House. The only no votes on that bill came from Republican Representatives Rod Bockenfeld, Stephanie Luck, and Rod Pelton, and lone Democrat Tom Sullivan; however, all four legislators still put their names on the bill as co-sponsors.
While that bill (which took into consideration the 2023 and 2024 property tax years) lowered the valuation rates on most all classifications of property and reduced the actual value anywhere from $15,000-$30,000, it promised a backfill to counties less than 300,000 in population and with less than 10 percent increase in assessed value from 2022 to 2023 amounting to 100 percent of its loss due to the reduction in rates.
It also promised a backfill to counties less than 300,000 in population with more than 10 percent increase in assessed value of from 2022 to 2023 amounting to 90 percent of its loss due to the reduction in rates and a 65 percent backfill to any county that didn’t qualify for either the 90 percent or 100 percent backfill.
Finally, it promised a backfill equal to that of the counties to municipalities, fire districts, health services districts, water districts, sanitation districts, and library districts.
Competing Republican tax plans
Since Complete Colorado first reported on Democrats looking to raid TABOR refunds under the guise of property tax reform, two Republican options have surfaced.
One is a Van Winkle bill that is a near carbon copy of House Bill 23-1054, originally authored and sponsored by Rep. Lisa Frizell, R-Castle Rock, and Sen. Byron Pelton, R-Sterling in the last session. It died in committee.
Two other bills, near mirror images of each other, are being sponsored by Minority Leader Mike Lynch, R-Fort Collins and Rep. Rose Pugliese, R-Colorado Springs in the House and Sen. Barbara Kirkmeyer, R-Brighton and Pelton in the Senate.
In those bills property tax assessment rates are dropped from 6.765 percent to 6.5 percent and 27.9 percent to 25 percent for residential and commercial properties, respectively. Property value reductions will increase to $80,000 and $60,000 for residential and commercial properties, respectively. In the Senate version, a reduction of income tax rates from 4.4 percent to 4 percent is included.
There is an estimated $617.5 million in backfill funds that will go to small counties where assessment values did not increase more than 10 percent and who will be hurt fiscally by a reduction in assessment rates.
The bill will be paid solely out of general fund reserves, which has a current balance of around $2.3 billion.
“We live in one of the most expensive states in the nation,” Kirkmeyer told Complete Colorado. “Coloradans like my 93-year-old neighbor, or the young couple in their first home or the single mom who is worried about putting Thanksgiving dinner on the table for her kids need real tax relief now, more than the state needs to sit on $2.3 billion dollars in their coffers.”
Pelton previously told Complete Colorado that TABOR refunds are off-limits.
“Whatever meaningful tax relief is, nothing can come out of TABOR surplus,” Pelton said. “And Republicans are rallying around that.”
