Caps on property tax growth cannot fund constitutionally mandated programs.Points | Opinions

One of the most impactful policies in Colorado over the past few years has been property taxes. The Gallagher Amendment was approved by voters in 1982 as homeowners were concerned about raising their residential property tax rates before it was repealed in 2020. As a result of this pressure, a commission developed a policy that would split the state’s residential and commercial property tax rates. The amendment would require 45% of state property taxes to be collected from residential properties and the remaining 55% from commercial properties, capping the commercial tax rate at 29%.

One proposed ballot initiative to combat increased property tax costs this year would limit property tax revenue to 4% growth above last year’s statewide property tax revenue. . Voter approval would also be required if property tax revenue is expected to increase by more than 4%. Sounds easy, right?

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What the proposal doesn’t discuss is that a 4% growth cap would hardly raise enough revenue to fund constitutionally mandated programs, which would require support from property taxes. A recently published financial report prepared by the General Assembly’s Legislative Council Secretariat estimates the cost of this proposal to be $3 billion in 2025. Yes, you read that correctly. If the property tax cap was set at 4%, the state would be in a position to recoup $3 billion in back pay to local governments. Subsequently, the backfilling is estimated to increase to $3.1 billion in 2026, and the amount will increase further in the future. Picture a chart in your head right now. The expected growth rate is a steep line and the acceptable growth rate percentage is a flat line.

There is a need to set a cap on property taxes | Counterpoint

Supporters of the bill argue that Colorado’s budget is $40 billion and that money should be “found” to fill the gap, but to understand the absurdity of that directive, state budget There’s a lot to know about. First, Colorado’s general fund is only $15.1 billion, the only area where the Legislature actually has discretion. Second, Colorado has a constitutional obligation to balance its budget each year. This means that our country cannot run a deficit. Colorado voters also passed an amendment requiring K-12 education funding. Colorado is also constitutionally required to fund senior homestead and veterans property tax exemptions, superannuation benefits, and constitutionally mandated TABOR refunds. And all this before funding Medicaid, transportation and infrastructure, public safety, and the host of services Coloradans depend on.

This is a consequential and difficult topic that requires many nuances and choices. But we assign catchy phrases to it and legislate to simplify problems and solutions. Sounds easy and catchy, but in reality, it’s a policy that will bankrupt the programs Coloradans depend on while destroying quality of life that requires more than a bumper sticker solution.

Lisa Labriola is a principal at Husch Blackwell Strategies and served on the Senate Democratic staff for nearly a decade. She served as chief of staff to former Senate Minority Leader Lucia Guzman and former Senate President Leroy Garcia. The opinions expressed here are her own and do not reflect the opinions of any other organization.