(Colorado Newsline) The Colorado General Assembly gaveled in Monday to consider a property tax proposal that backers say is a compromise deal to get rid of a pair of ballot initiatives that would severely cut local funding.

The House was nearing the end of its final committee hearing at 6:00 p.m. Monday evening, ushering through the compromise bill and at least two others. The committee had two more bills to vote on at the time of publication.

The Senate adjourned in the early afternoon after killing two bills in committee.

The session will last until at least Thursday.

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The Legislature’s regular 2024 session ended in May, but Governor Jared Polis called it back to work to enact a deal that would persuade a duo of conservative groups to pull two initiatives from November’s ballot and commit to not bring similar property tax proposals to future ballots. Those initiatives, Democratic legislative leadership warned, would deeply cut property tax revenue and be disastrous to state finances.

“What we are doing here today, at the governor’s call, is governing with great responsibility. This is a moment for us to diminish the threats of two ballot initiatives that would upend the state, that would deliver catastrophic blows to the investments we have made over these past few years — particularly to public education, to the services that are provided locally within our state, and to special districts,” House Speaker Julie McCluskie, a Dillon Democrat, said ahead of the start of session on Monday morning.

Democrats hold strong majorities in both chambers of the Legislature.

Property taxes are collected by local governments and fund services like schools and fire response. Though Colorado has some of the lowest rates in the country, property tax bills have spiked in Colorado in recent years largely due to rising home values.

“I’m looking forward to providing a little bit more property tax relief to those who need it the most, but most importantly, to getting the existential threat of (Initiatives 50 and 108) off the ballot and out of the equation for the future of our communities,” said Senate President Steve Fenberg, a Boulder Democrat.

Hope for sustainability and certainty

In recent years, legislators have worked to incrementally reduce property taxes in the state, including during a special session last November and through a bipartisan bill in May that reduced rates and provided over $1 billion in cuts but fell short of swaying initiative backers to take the measures off the ballot.

The deal on the table would reduce residential and many non-residential property assessment rates beginning with the 2025 property tax year. It would also modify the local growth property tax revenue limit and establish a limit for school district revenue growth.

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In total, the bill would provide about $248 million in savings in tax year 2025 and about $271 million in savings for tax year 2026, according to a nonpartisan state analysis. It includes a mechanism to reimburse $81 million the first year and $92 million the second year to schools and local taxing districts.

Bill sponsors say it builds on the property tax relief bill from earlier this year.

The savings for individual homeowners will vary with location, but it would likely be less than an additional $100 per year. Sponsors hope it will offer some sustainability and certainty to local government budgets.

In a letter Monday, the conservative organizations — Advance Colorado and Colorado Concern — behind Initiatives 50 and 108 said they would not bring any ballot initiatives that reduce property tax revenue for at least six years, as long as the Legislature, executive branch or courts don’t “go back on the provisions of the agreement.”

Initiative 50 would amend the state Constitution and limit property tax revenue growth to 4 percent statewide, while Initiative 108 would cut property taxes by an estimated $2.4 billion.

Proposed constitutional amendment

Lawmakers introduced 12 bills for the special session aside from the primary compromise property tax bill. Committees killed the majority but left a few intact.

That includes approving a bill brought by Democratic Representative Mike Weissman of Aurora that would refer a constitutional amendment to voters this year requiring local jurisdictions to also approve, through an election, any successful statewide ballot initiative that affects property tax revenue.

Republicans have already criticized the bill as a move to block Coloradans from using the citizen ballot initiative process, but proponents say it would be a way to pass property tax control back to local governments.

“What I’m very interested to see is which of the usual proponents of local control will oppose giving voters the chance to decide if they want more of it. Because that’s really what we’re talking about,” Kevin Bommer, the executive director of the Colorado Municipal League, said in support of the Weissman bill.

Another bill that made it through from Democratic Representative David Ortiz of Littleton would reduce assessment rates for newly constructed accessible housing.

Bills that died in committee included one that would base property taxes on land value instead of home value, one that would have adjusted value exemptions based on home value to give more relief to lower-income homeowners, and one to reinstate the Gallagher Amendment, a 1982 constitutional measure that kept residential assessment rates low while raising rates accordingly for non-residential property.

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