Even if Prop HH passes, property taxes are still going up

by | Oct 2, 2023 | Blog, Capitol Review | 1 comment

We didn’t need an election this November to receive a modest property tax reduction.  The legislature can cut taxes anytime; it doesn’t need voter approval.

But with Coloradans facing the largest property tax increase of our lifetime due to soaring home prices, the legislature chose to put a massive expansion of government on the ballot disguised as a property tax cut.

Remember this: even if Proposition HH passes, property taxes will still increase.  If property values double in the next 10 years, so will property taxes.

The deceptive ballot question asks: “Shall the state reduce property taxes for homes and businesses…”  That sounds good, so voters may not read much further.  Even if they do, the ballot never explains voting “yes” is agreeing to give up refunds under the Taxpayers Bill of Rights (TABOR) and to permanently increase the cost of state government.

Voters are facing an average increase in home property taxes of 36% come next January.  In some communities, the increase could be nearly 50%.  If Prop HH passes, the average increase will be 26% – still the largest property tax increase of our lifetime.

The statewide average tax increase is estimated at $848 if HH fails and $617 if HH passes.  The only thing that truly decreases if HH passes are the annual refunds that voters receive each year.  This hidden part of HH will cost the average Colorado household $5,119 over the next 10 years.

Even the legislature’s official ballot explainer says, “The measure results in a smaller increase in property taxes than under current law.”

The devious part of HH is that lawmakers are paying for this small tax cut by taking it way from TABOR refunds they owe to all taxpayers.  They’re simply taking money out of your left pocket to put it into your right pocket – and pretending they’re doing you a favor.

But all of that is small potatoes compared to the big picture bait-and-switch:

Tucked away in Prop HH is a provision that increases how much state government spending can grow each year.  Currently, the state constitution allows annual spending to increase by the combined rate of population growth plus inflation.  For 2023 that’s 8.5% or about $1.5 billion in new spending.

Prop HH will add an extra 1% every year for 10 years.  By 2032, that extra 10% adds up to $2.2 BILLION A YEAR – all taken away from taxpayer refunds.

That’s not the end of the HH scam.

After 10 years, the legislature can continue to add 1% more per year to state spending without voter approval.  The only requirement is that lawmakers extend the HH property tax rates.  But if property values continue to soar, your property taxes will soar right along with them.

Keep in mind the legislature has already increased regulation, taxes and fees by $1.8 billion – mostly without voter approval.

That’s still not the end of the HH scam.

Renters really get shafted by HH because they disproportionately lose their TABOR refunds but won’t benefit from the small reduction in property taxes.  Under HH, rental properties are taxed at higher rates than owner-occupied properties, so rent costs will inevitably increase to pay those taxes.

Worse still, the Legislature tries to bribe renters with a one-year change giving all taxpayers equal refunds for 2023 only. Taxpayers with income under $99,000 will receive an “extra” $37 to $233 for one year only.  By the end of 10 years, higher state spending will eat up everyone’s refunds.

Common Sense Institute predicts that renters “are the biggest losers” from Prop HH because they will see none of the benefit from property tax reductions but will lose an estimated $5,119 in tax refunds over the next 10 years.

Why would anyone vote for Prop HH?  Proponents argue it will greatly improve public school funding.  So why didn’t they simply put that question on the ballot?  Obviously because they feared voters would say “no” unless tricked into thinking they were voting for a property tax cut.

If Prop HH fails, Gov. Polis and lawmakers still have time to call a special session to pass a straight-forward property tax cut. They passed the bill that created Prop HH in just three days.  They can do the same with real property tax relief.  And they should.

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