“A citizen’s right to initiate a measure for the ballot is sacrosanct. … Direct democracy is a key feature of Colorado’s political framework — a framework that was in large measure shaped by the citizens of the state — and one that I will always champion and protect as governor of Colorado.” — Gov. Jared Polis
A billion-dollar property tax cut is a big deal. But there’s something even bigger at stake when it comes to Proposition 120: the fate of Colorado’s 111-year-old citizen-initiative process. To understand why the vote Tuesday (and the legal battle that will follow) is so important, we have to go back to why this proposition is on the ballot in the first place — and what the Legislature and Gov. Polis — despite his words quoted above — are trying to do to undermine it.
Last year, Coloradans voted to repeal the Gallagher Amendment, which was approved by voters in 1982. While far from perfect, one benefit of the amendment was that it helped limit the growth of residential property taxes. Even with the Gallagher Amendment, however, total property taxes almost doubled in the past decade.
And as everyone knows, property values just continue to skyrocket in most parts of the state. Knowing that Coloradans would likely see a large increase in their property tax bills next year, we decided to file a ballot measure to lower property taxes for residential and nonresidential property by 9%. The residential assessment rate would drop from 7.15% to 6.5%, and the nonresidential rate would drop from 29% to 26.4%.
In Colorado, ordinary citizens have the same power as elected legislators when it comes to passing laws. Article 5 of our state constitution says: “ … but the people reserve to themselves the power to propose laws and amendments to the constitution and to enact or reject the same at the polls independent of the general assembly … ”
The process to pass a ballot measure is long and thorough. Proponents file the measure, meet with Legislative Council staff for review and comment, get ballot language approved by the Title Board; respond to appeals up to the Colorado Supreme Court, get 125,000 valid signatures and finally end up certified for the ballot by the secretary of state. The process takes at least six months — but usually much longer.
While we were going through these stages, county assessors were sending out the new assessments to property owners across the state. To put it mildly, there was sticker shock. Some people saw 17%-20% increases to their property’s value. That might sound good to someone who wants to sell their house and move to Kansas. But for people who want to stay in their homes, the increase in property taxes can become a big burden. Just because your house goes up in value doesn’t mean you have more money in your pocket to pay the higher taxes. Seniors and people on fixed incomes are obviously impacted the most by this rapid growth in property taxes.
On the nonresidential side, the assessment rate has been fixed at 29% for 40 years. This means Colorado’s commercial property rate is almost twice as high as Utah’s and three times as high as Wyoming’s, according to a study by the Common Sense Institute. Unfortunately, Colorado’s unemployment rate is still stuck at the 35th worst in the country. Thankfully, Coloradans understand that we have to take care of our small businesses if we want to grow the economy back.
Given all this, it wasn’t surprising that Coloradans were eager to sign our petition to lower property taxes. In fact, we collected over 75,000 signatures in just the first month of circulation. At the same time we were collecting signatures, opponents went to the Colorado Supreme Court to try to get Proposition 120 knocked off the ballot. On Friday, May 28, the Supreme Court rejected this challenge. But by Monday, May 31, the Legislature introduced a backup plan to try to thwart the ballot measure.
SB 293 was a bill to change the definitions of residential and nonresidential property and provide a minuscule temporary tax cut. The sponsors’ theory was that if they changed the underlying statute, Proposition 120 would then only apply to multifamily and lodging properties — and the $1 billion cut would be avoided. They knew that we were already halfway through our signature gathering — and we had no time to go back and adjust our measure after SB 293 passed.
The whole point of SB 293 was to thwart Proposition 120. These legislators didn’t want to allow voters to weigh in on the full tax cut — and the sponsors of SB 293 were completely open about that. State Sen. Chris Hansen sent around a PowerPoint outlining how his bill would undermine Prop 120. State Rep. Daneya Esgar said SB 293 was introduced to “help cushion what could be a devastating blow.” And Sen. Bob Rankin said that the Legislature had a “moral obligation to intervene … ” When SB 293 got to the floor, amendment after amendment was proposed to the bill from the ballot measure. Each amendment failed because the whole point of SB 293 was to stop Proposition 120
After reading Gov. Polis’ quote about how he would always be a champion for the citizen-initiative process, you would think that he would have vetoed the bill without a second thought. Instead, he proudly signed it shortly after the session adjourned. Then a few months later, he told the media that he planned to vote for Proposition 120 but that he wasn’t officially endorsing it. Politics is a funny business.
This brings us to why it is so important to pass Proposition 120. Housing prices are drastically rising, but government is also flush with money right now. Because of the pandemic, our state and local governments received more than $12 billion in federal stimulus funds. Over $2.5 billion of that money is going directly to our state’s education system. State revenue has also recovered so fast from the pandemic that taxpayers are projected to receive over $3 billion in refunds under the Taxpayer’s Bill of Rights (TABOR) over the next three years. Adding it all up, it’s clear that families and small businesses need this property tax cut stimulus much more than the government needs more of our money.
It’s important to remember that this measure also helps people who rent. When property taxes go up, those increased costs get passed on to tenants. Every little bit of savings helps people — especially when so many Coloradans are living paycheck to paycheck.
Additionally, Proposition 120 allows the state to retain $25 million for the Homestead Exemption for seniors and disabled veterans. The Homestead Exemption is extremely popular in our state — and rightfully so. The problem is, even though it’s in our constitution, the Legislature has decided not to fund it in certain years. This money would offer an incentive to make sure every eligible person receives this important property tax exemption.
Perhaps most important, passing Proposition 120 would help protect our constitutional right to the initiative process. Legislators thought that if they passed SB 293, we would back off and give up. But that was never going to happen.
The biggest reason to vote yes is because we have a great legal case if voters approve Proposition 120. When it comes to ballot measures, the actual ballot language is what matters. The courts look closely at voter intent. Almost 200,000 Coloradans signed a petition to cut taxes for everyone, not for multifamily and lodging property (which were categories completely made up by the Legislature). The Supreme Court upheld the language we see on the ballot. And that language is as clear as day. It says Proposition 120 is a $1 billion property tax cut for everyone.
There are at least three ways the courts could uphold this full tax cut. First, this could happen by reconciling the two statutes. This would mean allowing the new property categories to stand, but the assessment rates would be exactly what the voters approved through the ballot measure.
Second, when there are conflicting laws, the law that passes second is the one that prevails. As Jason Gelender, managing senior attorney for the state Office of Legislative Legal Services, said at a recent Title Board meeting on a different issue: “At least for statutes, we have a statute that says, if we have irreconcilable statutory provisions, well first, the goal is to harmonize them to the extent possible, and if you can’t harmonize them, the later in date controls.”
Third, the court could find that what the Legislature did with SB 293 violated the Colorado Constitution. Article 5 of the Colorado Constitution says that the citizen initiative process is “independent of the general assembly … ”
In this case, the intent of the Legislature is clear: It is trying to hijack our ballot issue (and use our appealing ballot language) to pass something completely different.
If you think Proposition 120 is a bad idea, this approach might seem appealing. But what if it was a different issue? What if it was your idea? What if you followed every rule and went through this extensive process only to see the Legislature decide it didn’t like the idea and didn’t want voters to even have an opportunity to weigh in?
Allowing SB 293 to overrule the voters would set a terrible precedent. It would tear down the guardrails that have been in place since the citizen-initiative process was approved by voters in 1910. As former Gov. Bill Owens said, “Should SB 293 be allowed to stand, it would serve as a precedent that anytime the Colorado Legislature does not like the potential results of a citizen ballot measure, it could simply pass a law that prevents the people’s vote from being put into effect.”
The Gazette editorial board put it this way: “What (the Legislature) did was a slap in the face to all Colorado taxpayers and a betrayal of the basic democratic principles they all claim to hold dear.”
When it comes down to it, elected officials like Sen. Hansen believe that voters aren’t smart enough to make their own decisions. Instead of trying to persuade voters, these politicians want to take away our ability to even vote on these issues. Elitism is alive and well in the Colorado Legislature. And we need to push back against it Tuesday.
Vote in favor of Proposition 120 because it is good policy. Cutting taxes by 9% is a good first step in reforming our property tax system. But also vote for it because elected officials work for us, not the other way around.
Vote YES on Proposition 120.