Proposition 120: A Colorado property tax cut that isnt what it seems

Here’s how this usually goes: Once a proposed measure qualifies for the ballots, campaigns have a few months to state their cases and voters decide. If the measure is approved, the state prepares to enact any resulting law changes.

Pretty straightforward, right? Not in the case of Proposition 120 on the Nov. 2 ballot.

What is Proposition 120?

Formerly known as Initiative 27, the ballot measure is backed by the conservative nonprofit Colorado Rising State Action, which has successfully fought for several recent policies to limit government spending in the state, like capping new government fees and cutting the state income tax.

Proposition 120 is in the same vein, seeking to lower property tax rates on homes and businesses for an average annual $1 billion combined savings for taxpayers. The measure would cut the residential property tax assessment rate from 7.15% to 6.5% and the non-residential property tax assessment rate from 29% to 26.4%.

Here’s where things get tricky

A coalition of Colorado lawmakers — mostly Democrats but with several GOP supporters — saw this billion-dollar tax cut coming and wanted to stop it. So, in the closing hours of this year’s legislative session, they took the unusual step of passing a bill to thwart Proposition 120.

SB21-293 makes a two-year cut that will bring total property tax collections down by about $200 million a year, and allows some property taxpayers to defer portions of their payments.

Crucially, it also rewrites state property-tax laws to break business and residential assessment categories into smaller subcategories. On June 23, the day Gov. Jared Polis signed the bill into law, the ballot measure applied to outdated state law. And that was the point: The bill lawmakers passed effectively nullified close to 90% of the savings promised by the ballot measure.

By the time SB21-293 got going, it was too late for Colorado Rising State Action to update its measure by adjusting language. Getting approval to circulate petitions can take months — collecting signatures can then also take months — and they’d have had to start all over.

Why oppose Proposition 120?

Lawmakers opposed this proposal because cutting property taxes permanently and at such a high rate would have profound impacts on local government operations from schools to parks to police departments. That’s the likely basis for opposition campaigns this fall, too.

Here’s how Republican state Sen. Bob Rankin put it in an interview with The Post earlier this year: “Do we really want to cut the budget for fire districts? I mean, really. That’s what will happen.”

He argued the legislature had an ethical duty to intervene.

Why support Proposition 120?

For one, it wasn’t entirely neutered by lawmakers: Under the updated state law, it still provides a tax cut for multifamily residential properties and commercial lodging properties.

It’s also possible that the measure could be enacted in its original intent. Michael Fields, the director of Colorado Rising State Action, vowed that if voters pass it, he will sue under the argument that of the competing policies — SB21-293 and Proposition 120 — the one most recently approved should be implemented.

“It’s going to be a battle of which one wins out,” Fields said. “One hundred percent, we’re going to sue if it passes.”

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