It’s supposed to be a great deal.
Colorado lawmakers appear set to pass a relatively small property tax cut this week. In return, conservative supporters have agreed to cancel their own campaign for a much more drastic tax cut in November with two ballot proposals.
If it works, both sides can claim victory and years of fiddling with the property tax system could finally come to an end. But there is still one small problem: How can such a deal be pushed through?
This is a fundamental challenge in a state where citizens are guaranteed the right to propose and vote on taxes and other issues. Some lawmakers are concerned that even if they pass a tax package now, they could end up in exactly the same situation later. What’s to stop a group from using the initiative process to push through more changes in a year or two?
“How confident are all of you about the deal? Have you looked these people, the proponents, in the eye and gotten an endorsement from them?” Democratic Rep. Leslie Herod asked in a committee hearing on Monday.
Much of the debate in recent years has been driven by the conservative group Advance Colorado and the business group Colorado Concern, which have regularly threatened to pass such tax-cutting measures. In response, lawmakers passed a series of early tax bills aimed at either appeasing the groups or blocking their path.
Getting the deal passed shouldn’t be too difficult, said Democratic Senator Chris Hansen, one of the negotiators on this year’s bill. He suggested that political leaders could sign a memorandum of understanding with the tax-cutting activists. The groups have already circulated a letter promising to keep their part of this year’s deal.
Hart Van Denburg/CPR News
“Our organizations are committed to a path forward that provides property tax relief to Colorado taxpayers and brings much-needed certainty to the property tax debate,” said the letter, which was also signed by the head of the Denver Metro Chamber of Commerce.
The letter promised that the groups would withdraw Initiatives 108 and 50 when the “agreed legislation becomes law.” Initiative 108 would reduce property tax revenues by more than $2 billion a year – making it ten times more impactful than the compromise proposal currently being debated in the House. Initiative 50 would impose a strict statewide cap on property taxes.
The alliance of business and conservatives also promises that it will not seek any further property tax cuts for “at least six years”.
But what about the others? Another group could also raise money, collect signatures and put their own tax cuts on the ballot. In theory, the money could even come from the same donors. Michael Fields, who is leading the tax cut campaign, would not say whether the truce applies to the anonymous donors who are funding this year’s campaign.
But some Democrats complain that they are being “held hostage” by ballot measures and forced into action by recklessly high tax proposals. And they have a plan to stop it by creating legal hurdles to future statewide property tax cuts.
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Representative Mike Weissman has proposed a constitutional amendment that would effectively put property tax decisions up to voters in each county. A single statewide law could no longer cut revenue for all counties. If the amendment were put to the ballot in November and passed by voters, any cut in local tax revenue would require local approval.
“Property taxes are local taxes. They fund local government, not state government,” Weissman said. “So elections and initiatives that affect them should really be decided locally.”
Some conservatives have attacked Weissman’s idea, saying it would be wrong to take away the power to cut taxes from state-level voters. Local voters don’t have the power to initiate property tax cuts for schools, special districts and most counties, so eliminating the statewide option would mean that in many counties, only local officials could cut tax rates.
“I am firmly opposed to taking away anyone’s ability to put a property tax or any other measure to a vote and let the people decide,” said Rose Pugliese, Republican minority leader in the House of Representatives.
Weissman’s amendment was approved at a committee hearing on Monday. It is unclear how the tax freeze proposal would affect the larger tax compromise.
Michael Fields, who is leading the campaign, declined to comment on the issue. Senator Barbara Kirkmeyer described the change to CPR News as a “deal killer.”
The road to the tax freeze measure is tough: To pass it, a two-thirds majority in parliament is required. This would require the support of at least one Republican senator.
Hart Van Denburg/CPR News
Senator Paul Lundeen, the Republican minority leader in that chamber, said the grand compromise must ultimately be based on trust.
“All that is possible is the consent of a polite person, and a polite person cannot bind a future General Assembly, nor can a polite person bind the people of Colorado,” he said.
For lawmakers who want to get this special session over with quickly, the situation is further complicated by the fact that other Democrats and Republicans have also introduced a number of measures of their own.
Some want to adjust the property tax formula to favor certain groups. A committee has unanimously approved a provisional measure that would provide discounts for properties that are accessible to people with disabilities.
Meanwhile, committees on Monday rejected a number of other proposals, including one that would have considered eliminating property taxes altogether and another that would have allowed local governments to impose taxes on land use.
The meeting will last at least until Thursday.
