Colorado lawmakers agree to lower property taxes by $200M, obstructing possible bigger cut

Colorado Democrats made quick work of passing bill to cut property taxes by $200 million, with all but five Republicans in opposition.

Normally, Republicans would enthusiastically support tax cuts, with Democrats taking a more skeptical approach — but there is a specific reason for this atypical outcome.

An outside conservative group called Colorado Rising Action is collecting signatures to refer a $1 billion property tax cut, Initiative 27, to the November ballot. Democrats (and a few Republicans) are worried about what happens to funding for school districts, fire departments and other public services if voters approve the initiative.

SB21-293 is lawmakers’ solution. Of all major bills this year, SB21-293 moved faster than any other — passed Tuesday morning just days after it was introduced and hours before the expected end of the 2021 legislative session.

It would provide $200 million in property tax relief that would run for only two years. But in going from two classifications — commercial and personal property taxes — to six classifications, the bill undercuts Initiative 27 because the taxation categories it’s based on would be outdated by November.

“This body should get out of the way of the citizens,” GOP Rep. Tim Geitner said just before the bill, which he called “an obstacle to Initiative 27” received final approval Tuesday. Republican Rep. Rod Bockenfeld of Watkins called it a “scheme” and an attempt to subvert voter will.

House Majority Leader Daneya Esgar, a Pueblo Democrat who sponsored SB21-293, and others who back the bill have been open about the fact that they’re seeking to thwart the ballot measure.

She said it would “help cushion what could be a devastating blow,” echoing Republican Senate bill sponsor Bob Rankin, who said the legislature has a moral responsibility to intervene when something “injurious” is in the offing.

“Initiative 27 will be a billion dollars cut from your water districts, from your fire districts, from your special districts,” Esgar said.

The next step for the bill is Gov. Jared Polis’ signature, which according to Esgar is assured. Colorado Rising Action has threatened legal action.

SB21-293 is one of the three tax-code changes passed during the final week of the 2021 session. Two others, HB21-1311 and HB21-1312 would eliminate tax breaks for wealthy individuals and businesses, diverting the savings to poorer people and families, and small businesses.

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