County Assessor shares concerns about Polis's Property Tax Cut Bill
Last updated 5/24/2022 at 2:41pm | View PDF
The traditional case against high property taxes is that they deter investment, chase people out of their neighborhoods, and make it harder to attract new residents.
This is a realization many property owners in El Paso County are facing today with the continual increase in property values-which is determined between a willing buyer and a willing seller in our local real estate market.
There are four broad categories of property tax limitations: Assessor Property Values, Assessment limits, Levy Limits, and our Taxpayer Bill of Rights Amendment. These Assessment limits seek to limit how much any individual homeowner or commercial property owner's taxes can rise due to increases in assessed value, while potentially introducing highly unequal tax burdens across similarly-situated properties.
On Monday, May 16, 2022, Governor Polis signed Senate Bill 22-238 into Law, which is a Bill concerning the reductions in Real Property taxation for tax years 2023 and 2024.
This Bill, for tax year 2023, reduces the assessment rate of Nonresidential (Commercial) Property, excluding Agricultural and Renewable Energy Production Property from 29% to 27.9%. It also reduces the assessment rate for Single Family Residential, and Multi-Family (Apartment, 4-Plexes, Duplexes, Etc.) to 6.765%. In addition, this Bill reduces the assessor's actual value of all Commercial Real Property by $30,000, and Residential Real Property by $15,000. In addition, this Bill outlines that El Paso County will only be reimbursed 65% of the total loss of tax revenue by the State.
For tax year 2024, this Bill continues the assessment rate of Real and Personal Property that is classified as Agricultural or Renewable Energy Production at 26.4%. Our Single Family Residential assessment rate will be based on there being a specific modification determined by the State's Property Tax Administrator, and our Multi-Family (Apartment, 4-Plexes, Duplexes, Etc.), will be increased from 6.765% to 6.8%.
As a strong proponent of limited property tax and our TABOR Amendment, I am in support of this Bill with the lowering of assessment rates, property values, and the lowering of our property taxes; however, there needs to be much more transparency.
This Bill has been sold as a Property Tax Cut for every property owner in the State of Colorado for tax years 2023 and 2024. It is my thought that tax cuts are reductions to the amount of taxpayers' money that goes toward government revenue, and is less than what they paid in property taxes the year prior. What is not being shared is that every odd year in the State of Colorado is a reappraisal year and all Colorado Assessors are required by law to perform analyses of local market conditions, and adjust their appraisals accordingly. The new level of value will be generally based on the analysis of sales data (market approach) and the consideration of cost and income approach for vacant land and commercials.
I am extremely concerned that this Bill is going to create much property owner confusion leaving many to believe that their yearly tax bill will be less than what it was this past year. This will not be the case due to the upcoming 2023 reappraisal, and am also concerned that this Bill is only good for tax years 2023 and 2024. What happens next? Do the assessment rates for all of our residential and nonresidential property owners go back up, and worst yet do the value decreases outlined in this Bill be added back on in 2025, which again is another reappraisal year. This is a perfect storm arising from a very rare combination of adverse conditions and factors where we all could see a significant increase of our property taxes in tax year 2025 payable 2026.
More to come! I will be hosting virtual and in-person town halls further explaining the pros and cons of this Bill. It is the government's duty to be transparent.