Colorado voters reject Proposition HH, forcing governor and legislature back to the property tax relief drawing board

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Colorado voters on Tuesday soundly rejected Proposition HH, a complicated
tax and spending measure that would have provided hundreds of dollars in
property tax relief each year for the typical homeowner, while reducing
state taxpayers’ refunds and expanding state spending on schools.

As of 11:15 p.m., the measure was being rejected by 61% of voters. Voters
in just six counties — including Denver and Boulder — had supported for
its passage. The Associated Press called the race before 8 p.m.

The overwhelming rejection of the ballot measure was a major defeat for
Jared Polis, the state’s popular Democratic governor, who spent much of
the past year pushing unsuccessfully for policies that he said would
reduce housing costs across the state. His office authored Proposition HH,
which was referred to the ballot at the eleventh hour by Democrats in the
legislature. But the complex proposal never won over the enthusiastic
support of liberals, while Republicans remained staunchly opposed to the
measure and conservative groups spent millions to seek its defeat.

Conservatives celebrated Tuesday night at an Aurora sports bar, calling
the measure a victory for Colorado’s government-limiting Taxpayer’s Bill
of Rights.

“The message tonight is really simple: Government has enough money, live
within your budget,” former Gov. Bill Owens, a Republican, told the crowd.
“The only reason this was on the ballot was to do away with the TABOR
refund. That was the only reason.”

Proposition HH’s failure means Coloradans’ property tax bills could go up
as much as 40% on average next year without intervention by the General
Assembly or local officials. There’s little time to make changes before
local governments prepare their budgets and tax bills go out, so the
legislature and Polis will have to decide soon whether to take action.

They could call a special lawmaking term before the end of the year or
attempt to cut property tax rates when the legislature reconvenes in
January. Republicans on Tuesday renewed calls for Polis to convene a
special legislative session and have already put forth a number of broad
property tax relief proposals in anticipation of the measure’s failure.

“The governor needs to call a special session — do it tonight, do it
tomorrow, fix this property tax system immediately,” said Michael Fields,
the leader of Advance Colorado Action, a conservative group that
campaigned against the measure. “TABOR’s not going anywhere, and neither
are we.”

Polis, who was at the Western Governors Association meeting Tuesday night
in Jackson, Wyoming, issued a statement through a spokesperson.

“The governor thanks everyone who voted in this year’s election,” said
Conor Cahill, Polis’ press secretary. “While he is disappointed voters
didn’t pass a long-term property tax cut, he is currently considering next
steps.”

Also looming large is a measure authored by conservatives on the 2024
statewide ballot that would cap annual property tax increases statewide at
4%, limiting the amount of money collected by schools and other local
taxing authorities that rely on property tax revenue.

Some voters told The Colorado Sun they liked Proposition HH’s school
funding provisions or its property tax cuts. Others said it didn’t provide
enough cost savings to them personally, or that they didn’t want to cut
taxes at all. And on Election Day, supporters and opponents alike
expressed uncertainty — and confusion — about how the proposal would
actually work.

Patrick Garvey, a Democrat, said he was conflicted, but voted against
Proposition HH — “begrudgingly.”

“I feel like the issues within that proposition need to be isolated and
voted on separately because it’s confusing for the average person,” said
Garvey, who dropped off his ballot outside the Denver Botanic Gardens
early Tuesday afternoon.

The measure was unusually complex even for Colorado, a state with a long
tradition of asking voters to weigh in on complicated tax policy
questions.

Proposition HH would have provided relief from rising property taxes on
the one hand, by reducing the statewide residential assessment rate to
6.7% from 6.765% and expanding existing tax exemptions for homeowners.

On the other, it would have increased the state revenue cap under the
Taxpayer’s Bill of Rights by 1 percentage point a year for at least the
next 10 years. That would have reduced, or in some years even eliminated,
taxpayer refunds owed under TABOR in years of strong economic growth.

In a statement, Senate President Steve Fenberg, D-Boulder, said
Proposition HH was “about providing long-term tax relief for Colorado
seniors and families” without harming schools and other local services. He
blamed a “far right” misinformation campaign for the proposal’s defeat by
voters.

“It’s unclear tonight what the pathway forward is,” said Fenberg, who
chaired the campaign in favor of the measure, “but it’s clear the answer
is not Initiative 50 (the conservative tax cut measure), which would amend
the constitution to permanently reduce funding for schools, fire districts
and libraries.”

The change to the TABOR cap could have allowed the state government to
spend as much as $2.2 billion in additional tax revenue annually by 2032.
The vast majority of that money would have gone to K-12 schools.

The boost to education funding was what won the vote of Susan Katz, a
Boulder Democrat.

“We are totally open to paying more taxes, and we’re anxious for more
money to go to education,” Katz said. “We like what the governor did with
early childhood education (universal Pre-K) and we want to support him.”

But that message was largely missing from the campaign and from Polis
himself, who tried to pitch voters on tax relief first and foremost.

That pitch was lost on some renters like Garvey, who didn’t expect to
benefit from it. Chris Okere, a homeowner who cast his ballot in Boulder,
said he voted for it, but with misgivings.

“It’s all about property taxes,” said Okere, a politically unaffiliated
voter. “I didn’t think that it’s a great deal, but if we don’t do it, then
our property taxes will go up 30 to 40%.”

Some of Proposition HH’s provisions were temporary, like a one-year change
to the TABOR refund formula that would have given more to Coloradans who
make under $99,000 a year, while reducing refund checks for higher
earners.

The measure also would have provided some financial assistance to local
governments to compensate for reduced property tax revenue, but the state
aid was designed to be limited and fade over time. As a result, the
measure was opposed by the Colorado Municipal League, Colorado Counties,
Inc., and the Special District Association of Colorado, which represents
local governments across the state.

Meanwhile, the true impact of other provisions would have depended greatly
on future unknowns, like the economy and the decisions of future elected
officials.

https://coloradosun.com/2023/11/07/proposition-hh-results-colorado-
property-taxes/