Colorado legislative leaders said there is a willingness to expand portability for a reduction in property taxes for senior homeowners next year, but it could be difficult with severe budget constraints.

“It’s all about how we can figure out a way to afford to do it,” said Senator James Coleman, a Denver Democrat recently elected by his caucus to become the next Senate President.

“If you raised a family, were blessed to have a home, and then got to a place where you didn’t need all that space, but you still wanted to keep that exemption — just because you move from one place to another doesn’t mean you should continue to pay at a higher level. You should be able to move within the state of Colorado and still have that exemption,” Coleman said.

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He made the remarks during a legislative preview breakfast on Wednesday morning that was hosted by Colorado Politics and AARP Colorado and focused on issues for older people.

The senior homestead property tax exemption applies to half of a home’s value up to $100,000. A homeowner has to be at least 65 years old or a disabled veteran and have lived in their home at least 10 years to qualify.

This year, lawmakers approved a bill to let homeowners keep their exemption if they move, but it only applies to the 2025 and 2026 property tax years.

House Minority Leader Rose Pugliese, a Colorado Springs Republican, agreed that portability is a long-term priority.

“I’m glad that this year, in a bipartisan way, we were able to pass portability even in the short term,” she said. “It’s about helping our seniors be able to stay in Colorado and afford to live here, but it is also about giving them the opportunity to downsize and open those homes for growing families.”

The exemption is paid for with refunds given under the Taxpayer’s Bill of Rights, which requires the state to refund money to residents if they collect more than an amount dictated by population and inflation. If revenue does not exceed that TABOR limit, the exemption is paid for with General Fund dollars.

Lawmakers are facing an especially difficult budget year next session and will need to close a nearly $1 billion financial gap, which does not leave a lot of room for any new potential spending.

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“The budget document reflects our values and we will continue to struggle with priorities,” House Speaker Julie McCluskie, a Dillon Democrat, said. “I’m confident that we will continue to work hard to be able to keep portability in Colorado’s future.”

Legislators on the panel also faced a question about Medicare provider rates. McCluskie said that given “budget realities” this year, it is likely that the Legislature will not approve reimbursement increases. This year, the state’s Medicaid Provider Rate Review Advisory Committee recommended a nearly $600 million reimbursement increase, with the state paying $287 million and the federal government covering the rest.

“If we (see rate increases) this year, it will be in very limited or narrow areas,” McCluskie said.

The lawmakers were also largely in agreement that the business community should be included in conversations about updating Colorado’s union laws. A bill next year is set to eliminate Colorado’s requirement for a second vote to establish union security, and Governor Jared Polis, a Democrat, has already expressed hesitancy.

“As much as I support labor and am there for them, I also feel it’s very important to make sure that our business community is part of this conversation and part of this policy making because it impacts everyone,” House Majority Leader Monica Duran, a Wheat Ridge Democrat, said.

The Legislature reconvenes January 8. Democrats control a majority in both the House and the Senate.

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