Governor Jared Polis of Colorado has taken a proactive step by calling a special legislative session for August 26. The session aims to address potential ballot initiatives that could have adverse effects on public financing, education, and local government funding in the state. Polis emphasized the urgency of the situation, highlighting the need to protect critical institutions from funding cuts.
Initiative 50, set to appear on the November 5 ballot, seeks to impose a 4% cap on statewide property tax revenue growth, subject to voter approval for any increases. On the other hand, Initiative 108, awaiting certification for the ballot, proposes lowering assessment rates for residential and nonresidential properties. These initiatives have raised concerns among Colorado bond market professionals due to the lack of clarity on implementation and potential litigation risks.
Governor Polis has put forth a framework that builds upon existing legislation, such as Senate Bill 233, to provide property tax relief while safeguarding local government and school district funding. The proposed changes are expected to save property owners an estimated $270 million on their 2025 tax bills. Polis has made it clear that he will not sign any legislation from the special session until Initiatives 50 and 108 are withdrawn from the ballot.
Zach Bishop, head of Piper Sandler’s special district group public finance investment banking, has expressed support for the latest legislative draft, indicating that it addresses concerns related to metropolitan districts’ debt and financing mechanisms. However, Ann Terry, CEO of the Special District Association of Colorado, remains cautious about ensuring the removal of the ballot initiatives and protecting special districts.
The proposed legislation, in combination with Senate Bill 233, could result in significant annual tax savings amounting to nearly $1.6 billion. This substantial reduction in property tax burdens is crucial for Colorado residents, especially in the face of escalating home values. The repeal of the state’s Gallagher Amendment in 2020 has further underscored the need for effective property tax regulation.
Governor Polis’ proactive approach to addressing property tax cuts through a special legislative session demonstrates his commitment to protecting essential public services and educational institutions in Colorado. By engaging with stakeholders and proposing comprehensive solutions, the state aims to strike a balance between tax relief for property owners and maintaining adequate funding for critical programs. The upcoming session will be crucial in determining the future of property tax policy and its impact on Colorado’s residents.