Colorado Governor Jared Polis Signs New Property Tax Law, Delays Gas Fees
Gov. Jared Polis began his bill-signing tour after the General Assembly on Monday by enshrining into law an effort to soften the bite of rising property taxes and another that delayed a gas tax initially. scheduled to come into force this year.
The first, SB22-238, amounts to a $700 million reduction in property taxes in 2023 and 2024 as policymakers try to reduce the amount homeowners owe due to soaring property values. It reduces the portion of a property’s real value that is used for tax purposes.
“This will help ensure that no one is deprived of the price of the house they live in, just because the value of that house has gone up,” said Polis, a Democrat re-elected this fall. “This is the first non-residential assessment rate reduction in 40 years. This means that for 40 years the assessment rate has gone up and up for small businesses in our state and now it is dropping dramatically.
Due to the recently repealed Gallagher Amendment, Colorado historically relied on commercial property taxes for the majority of this funding base. This new law — which has fended off threats of competing ballot measures to shape property tax policy — gives state officials leeway to find a longer-term solution.
“We responded to this moment with a very thoughtful package,” said Sen. Chris Hansen, a Democrat from Denver, at the bill signing on Monday. “Keep in mind what this bill also does is make sure we don’t rely on insensitive formulas in our Constitution to deal with this problem, because we know the downsides of that.”
Polis has previously said he expects the law to save the owner of a $500,000 home about $274 a year and the owner of a $500,000 commercial property about $1. $200. To do this, it increases the assessment rate from 29% to 27.9% for commercial properties and from 6.95% to 6.765% for residential properties.
To pay for the cuts, the state is setting aside about $400 million for counties so they don’t cut budgets for things like schools or fire departments. On the latter, Hansen noted “the high likelihood of a major fire season” — an incongruous note in an event on the topic of tax and fee relief. The $400 million comes from a mix of one-time money and refunds owed to taxpayers through the Taxpayer Bill of Rights. Another $300 million is expected in lost revenue.
The $200 million in tax refunds drew criticism from some Republicans who accused Democrats of filling the deal with money already owed to taxpayers. Even when signing the bill, Hansen and Polis touted it as a $700 million tax break, while fellow sponsoring state Rep. Patrick Neville, a Castle Rock Republican, called it a half a billion dollar cut.
Either way, the bill ended up sailing through the legislature with unanimous votes in every house. Neville, a staunch conservative, said the option of signing a bill that cut taxes so much was not a choice at all.
“It’s probably no surprise to anyone that I hate taxes, but the worst kind of taxes are property taxes, where you literally pay the government rent on something you bought that they didn’t give you. not help pay,” Neville said. “And so that’s the worst kind of taxes and anything we can do to make those taxes easier, I totally agree.”
Polis also signed HB22-1351, which delays the implementation of a 2-cent-per-gallon gasoline levy until April 2023. The levy was part of a 2021 bill that was expected to yield more $1.6 billion by 2032. It was supposed to go into effect in July, but Polis and lawmakers withdrew that plan in January as inflation rose.
While arguing that Colorado actually has lower gas prices per gallon than the nation’s average, Polis has always encouraged Coloradans to shop around and in particular to avoid stations selling it at $4.40 a gallon. .