How will Gov. Polis’ property tax relief bill impact homeowners in Routt County?
State legislation leaves local leaders hoping for more
Gov. Jared Polis’ 11th-hour property tax relief bill prompted more than 50 proposed amendments and even supplemental legislation, as the sweeping legislation put forth a 10-year plan that promises Coloradans a property tax cut.
But what will the implementation of SB23-303 look like?
In terms of the bill’s impact on Routt County, it might not affect people’s tax valuations much.
“I think that this bill represents only a marginal amount of help in terms of property taxpayers in Routt County,” Commissioner Tim Corrigan said. “The combination of the $40,000 actual value reduction and the decrease in residential assessment ratio will not result in a significant reduction.”
An average 40% increase in home values over the last two years statewide has driven the bill that presents a 10-year plan to curb the rise of property taxes in Colorado. To make up for the property tax cuts, the bill would reduce the Taxpayer Bill of Rights refunds.
Backers of the bill advertise that it would cut 62% of the projected property tax increase for homeowners for the 2023 tax year. The bill would also reduce the residential assessment rate to 6.7% in 2023 for taxes owed in 2024. Proponents of the measure say the rate will remain unchanged through the 2032 tax year due in 2033.
The plan includes a reduction in the statewide residential assessment rate, which plays a key role in property taxes, and residential property owners would see the first $40,000 in their property’s value become tax-exempt. Additionally, assessment rates for commercial property would be cut, too.
Corrigan said further reductions in property taxes lie within the authority of the rest of the taxing entities throughout the county and how they might adjust their mill levies.
Additionally, supplemental bills have passed in an effort to address questions and provide clarification on certain aspects of SB23-303.
Concerns continue to circulate that local taxing entities, if they chose to lower their mill levies, would not be able to raise them again. So, the legislature passed SB23-108 on Sunday, May 7, the day before the end of the legislative session.
SB23-108 looks to supplement the property tax relief bill by giving more power to taxing entities to adjust their mill levies. The bill would also allow a local government to provide temporary property tax relief through temporary property tax credits or mill levy reductions, and later eliminate those credits or restore the mill levy.
Another bill passed in the 11th hour, HB23-1311, would create a flat rate for taxpayers’ refund checks, making them around $650 for single filers and $1,300 for joint filers.
In addition to passing legislation aimed at addressing several potential issues, lawmakers also added an amendment that looked to answer one of the most asked questions about SB23-303: How can you distinguish what is a primary residence and what’s a secondary residence?
The question stems from a provision of the bill that would increase the assessment rate for people’s “second family single homes,” also known as second homes or vacation homes, to 7.1% starting in the 2025 tax year through the 2032 tax year. The issue seems to be that Colorado has no mechanism that explicitly defines what’s a primary residence and what’s a second home.
“The requirement to identify properties that are primary residences will be costly for the assessors from a budget perspective,” said Brenda Dones, president of the Colorado Assessors’ Association. “The assessors have no way of knowing if a home is a primary residence or owned as a rental (short or long-term).”
An amendment added to the bill on Saturday, May 6, calls for the creation of a task force-type group — compiled of county officials, assessors and elected representatives from across Colorado — that will have the purpose of making recommendations about “ways to streamline and improve the designation of the primary residence real estate property.”
Dones said the Colorado Assessors’ Association welcomes any collaboration to better help execute the goals of the bills, but the association has taken a formal position in opposition to the bill.
Dones also noted that assessors would be forced to make changes to their computer software to manage certain provisions of the bill for confidentiality and property tax value reductions.
“We support the need to protect confidentiality, but this bill is creating complexities that will risk our ability to do so,” Dones said.
Alongside assessors seeking changes in the bill, county commissioners have their own list of amendments they are looking for.
Colorado Counties Incorporated decided in an emergency meeting Thursday to take an amendment position with the bill, citing the $40,000 property tax exemption as one of the aspects the group takes issue with.
Commissioner Corrigan, who was present at the meeting, said the group felt $40,000 was inadequate given the current price of homes in Colorado and wanted that number to be raised. He indicated many county commissioners also felt the bill was trying to tackle too many things at once.
“I think that there is frustration that this proposition is trying to address school finance at the same time as property tax relief,” Corrigan said. “Many of us believe that those should be separate issues.”
An aspect of the bill called “Proposition HH” would require the retained revenue from these taxes go to reimburse certain local governments for lost property tax revenue. This also calls for the revenue to be deposited in the state education fund for backfill purposes to make up for the deficit caused by taking from the state’s education fund to fill other budgets.
Kit Geary is the county, public safety and education reporter. To reach her, call 970-871-4229 or email her at kgeary@SteamboatPilot.com.
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