Proposition 120 proposes amending the Colorado statutes to:

• Lower the property tax assessment rate for non-residential property from 29% to 26.4%.

• Lower the property tax assessment rate for residential property from 7.1% to 6.5%.

Background

Property taxes are based on two numbers. The first is the assessment rate, currently 7.15% statewide for residential property. The second number is the mill levy. Each jurisdiction has its own rate. This initiative anticipates a reduction in revenue from property taxes of $1.03 billion and allows an increase in revenue at the state level of $25 million to partially compensate local governments for lost revenue.

  NOTE:  The General Assembly passed SB21-293 – Property Tax Classification & Assessment Rates – during the 2021 Legislative Session after the language for this ballot question was written. SB21-293 temporarily changes the property tax assessment rates for 2022 and 2023 for certain subclasses of property and establishes new categories of property. This change likely limits the application of Proposition 120, if passed, to multi-family housing properties and lodging properties.

 In addition, Proposition 120 would allow the state to retain $25 million per year for five years (through state budget year 2026-27) above the TABOR cap.

Those in favor say:

• Proposition 120 would cut property tax assessment rates by 9% for both residential and non-residential property. With home prices skyrocketing across Colorado, it’s time to cut property taxes. Just because home values go up doesn’t mean families have money to pay higher taxes.

• State and local governments have received $12 billion in federal stimulus funds. This makes it the perfect time to give families and small businesses a tax break. Even if Proposition 120 passes, government will have more money next year than it has this year. All this initiative would do is slow down the increase.

• Proposition 120 also provides $25 million in funding for the Homestead Exemption - which is a property tax break for seniors and disabled veterans.

Those opposed say:

• This would cut the revenue needed by mostly local entities including cities, counties, fire and police departments, schools and all special districts that rely on property taxes.

• It is true that rising property values have increased taxes in some places in Colorado, but there are localities where there has been little or no increase. If assessment rates decline, local entities cannot raise the mill levy without an election because of Taxpayers Bill of Rights (TABOR) requirements. These localities would suffer a substantial lose in revenue.

• It is important to note that once rates are cut, TABOR requires a difficult and uncertain process for restoring those cuts.

• The $25 million from the State promised for compensation to local taxing districts is not guaranteed and may not occur.