COLORADO, USA — Ballots start to arrive in mailboxes on Oct. 16, and there are two issues every voter in Colorado will see: Proposition HH and Proposition II.
Proposition HH would change the math that determines your property tax. If it passes, you will still see an increase in next year’s property tax bill, just not as high of an increase as if it fails.
In return, voters will be giving the state permission to raise the limit on how much it can keep and spend each year, which would reduce future Taxpayer Bill of Rights (TABOR) refunds.
Also, state lawmakers decided that only if Prop HH passes will the state send out TABOR refunds equally to taxpayers, regardless of income.
Proposition II asks you if the state can keep and spend $23.65 million additional tobacco and nicotine tax money that it failed to account for when voters passed Proposition EE to fund universal preschool.
Sandi from Centennial and Rick from Denver wanted to know about the impact Proposition HH would have on the senior property tax benefit.
Right now, homeowners 65 and older, who have lived in their homes for 10 or more years, can get up to $100,000 of their property value tax-free (it is really 50% of the first $200,000 of the home’s value).
Proposition HH adds an additional reduction of $50,000 tax-free this year, for the property taxes you pay next year. In 2024 through 2032, it would be $40,000 additional, instead of $50,000.
If you move, you can take the benefit with you.
Though, it would no longer be a separate exemption plus a property tax reduction. It would be one lump sum reduction of $140,000 from 2025-2032.
The impact Proposition HH would have on local governments is not as simple to explain.
Remember, Proposition HH would make a portion of everyone's property value tax-free, and it would change the equation that determines your property tax. In the end, it likely means your property tax still goes up, just not as much as it would otherwise.
In return, the state gets to keep and spend more money, and that means you'll get less in TABOR refunds in the future.
Some of that TABOR refund money you would no longer get would be used to reimburse school districts and local governments since they will be getting less than expected in property tax.
For example, a homeowner in Wheat Ridge funds several entities when they pay their property tax bill:
- Jefferson County School District
- Jefferson County
- Department of Social Services
- Library
- Road & Bridge
- City of Wheat Ridge
- Arvada Fire
- Urban Drainage
If Proposition HH passes, local governments like Jefferson County and the city of Wheat Ridge will get reimbursed 65% to 100% of what they were supposed to get from property taxes without Proposition HH.
It is 65% to 100% because it depends on how much money there is and because fire districts, EMS districts and hospital districts will get first dibs on that money.
And those reimbursements are not forever. Once property values increase by 20% from where they were in 2022, the reimbursement stops. Except for fire, EMS and hospital districts, once property values increase by 20%, the reimbursements drop to 50% of what they would have received without Proposition HH.
The summary is, if Proposition HH passes, local governments will eventually get fewer dollars than they would have otherwise.
RELATED: Who's for and against Prop. HH?
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