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7 reasons to give thanks for the 2023 Colorado Special Session on tax relief
Just days after the election in early November, Governor Polis called for a special session in Colorado. It began on November 17 and ended November 20, and held one focus: Property tax relief for Coloradans.
Special sessions aren’t common in Colorado and can only be called by the Governor or by a 2/3 majority request of the legislature. However, in the recent election, one measure on the ballot prompted the need for a special session just months before the 2024 general session is set to begin. With some estimates showing that property tax bills could be up to 50% higher in the years to come, the intention of Proposition HH was to provide property tax relief for homeowners and renters. On the ballot, Prop HH turned a lot of heads — but not necessarily in the right ways. For many, it was too convoluted to understand, and for others, it missed the mark for reliability. With heavy funding against the measure, it failed easily on election night.
With the failure of Prop HH, our state leadership was determined to do something before the start of the year. Legislators met for three days, the shortest length of time it can take to pass legislation through both the state House and the Senate. During the special session, Colorado Legislators fought for working-class families through responsible tax relief — reducing property taxes, putting more money back into Coloradans’ pockets through equal tax refunds, and providing rental assistance. Each bill has merit. Here is a breakdown:
House Bills
HB23B-1001: This bill created a $30 million emergency rent assistance grant the help people stay housed in 2024. An incredibly important need, because as property taxes rise, so will the cost of rent and the burden of increase is passed on to the renter. The funding for this bill comes from the state General Fund as well as the Revenue Loss Restoration Cash Fund.
HB23B-1002: The bill expands the state-earned income tax credit for tax year 2023 to $180 million. This provides additional tax relief through the earned income tax credit from 25% to 50% using TABOR refund modification mechanisms. This applies to 2023 only and means the tax credit will revert in 2024 without additional measures being taken in the 2024 general legislative session.
HB23B-1003 created an 11-member property tax taskforce with the mission to consider the causes of rising property taxes and submit potential solutions with a directive to submit their findings no later than 2027.
HB23B-1008 appropriates $87,910 to the Department of the Treasury to support the administration of property tax deferrals for 2023 as part of the property tax deferral program.
Senate Bills
SB23B-001: This bill lowers the property tax rate for residential properties from 6.765% to 6.7% for 2023 only. It also established a local government property tax reimbursement mechanism that will reimburse local governments $54 million in expected lost revenue and school districts $146 million.
SB23B-002: This bill provides food and nutrition benefits to low-income students in summer months. In 2023 the program will administer a little more than $6.5 million in benefits, with declining program benefit amounts in the following years. While the House still voted closely along party lines, the Senate, where this bill originated, was much more in alignment in support of this bill.
SB23B-003: While TABOR refunds are generally paid out using a six-tiered refund mechanism, this bill directs payments for the year 2023-2024 to be distributed equally among households in Colorado. While this has no impact on the total amount of refunds distributed, it means individuals will receive $847 and joint taxpayers will receive $1,694 in TABOR refunds.
With 2024 just weeks away, these seven bills can give Coloradans something to be thankful for in terms of immediate tax relief for residents across the state. These short-term relief measures will help us in the year ahead, and all eyes will be on the 2024 general legislative session to see what movement can be made for long-term solutions.