Property Tax Elimination
Bottom Line Up Front: Property Tax Elimination is ambitious but akin to how some states operate (many states have no income tax but rely on property; a few like New Hampshire have no sales or income but high property tax; Texas is trying to drastically cut property tax). We’d make Colorado possibly the only state with effectively no major property tax – that could spur housing investment and be a magnet for certain retirees or others (like Florida no income tax lures people; Colorado no property tax would lure as well, though making up revenue from maybe slightly higher sales tax). We’ll do it prudently and gradually with voter backing. But planting this flag now shows we prioritize homeownership freedom and trust people to use money better than government.
a. Easing the Burden on Homeowners: We advocate for the ultimate goal of Property Tax Elimination, or at least significant reduction, to allow Coloradans true ownership of their property without perpetual hefty taxes. Right now, even after you pay off your mortgage, you must keep paying property taxes or risk losing your home – which is like never fully owning it. Eliminating property tax on primary residences especially would protect retirees and working families from being taxed out of their homes as values soar (a big issue in Colorado with recent skyrocketing assessments). It also strengthens property rights: homes shouldn’t be revenue sources for government beyond initial sale or minimal fees. Of course, property taxes fund important local services (schools, etc.), so any elimination must come with alternate revenue solutions that are less burdensome or more broad-based (like consumption taxes, etc.). The vision is shifting taxation from punishing property ownership to perhaps sales or income where ability to pay is clearer.
​
b. Colorado Situation: Colorado’s property taxes have historically been lower than many states, partly due to the now-repealed Gallagher Amendment which controlled residential assessment rates. Gallagher’s repeal in 2020 led to a jump in residential assessments (thus taxes) as home values rose. This year, many saw huge assessment increases. The legislature offered Prop HH in 2023 to limit increases but at cost of TABOR refunds and voters rejected it. Clearly, people want property tax relief without giving up TABOR refunds. Our plan aligns: reduce property taxes significantly and offset by restraining spending or using other revenue streams as approved by voters. Some have floated eliminating property tax and using higher sales tax or other mechanism – e.g., Texas is considering property tax phase-out using surplus or raising consumption tax. We’d explore that. Also note, much property tax is local (city, county, special districts, schools). So, elimination would require structural change to local finance (like state taking over some funding responsibilities or providing replacement revenue to localities). It’s complex, but we’re aiming high.
​
c. Steps Toward That Goal:
​
1. Short-term Cuts via Rate Reduction: Immediately, push to lower assessment rates or mill levies. The legislature can adjust the residential assessment rate (RAR). Gallagher had it around 7.15% which then froze; it’s now near 6.95% by a recent law temporarily. We can propose permanently cutting it further, say to 5% or less, if budget allows covering schools from other funds. Or allow local governments to lower mills if they have surpluses. We might have to reimburse school districts to maintain funding (like state backfills have happened due to TABOR/Gallagher in past). With state’s strong revenue (and TABOR refunds projected), better to use some of that to reduce property tax burden.
​
2. Cap Growth and Freeze for Seniors: Implement a strong cap on property tax increases annually (like a Prop 13 in California approach – cap at e.g., 3% increase per year unless sold). Colorado has some relief: the senior homestead exemption (exempts 50% of first $200k for 65+ who lived 10 years) but it’s modest and sometimes unfunded. We would protect and enhance that and consider extending similar exemption to all primary residents (maybe lower percent but for everyone). Ultimately, a freeze for seniors on fixed income would ensure they aren’t taxed out.
​
3. Alternate Revenue Commission: Set up a commission to study how to eliminate property taxes within, say, 10 years and recommend an alternate tax mix. For example, raising state sales tax by a certain number of cents and using it to fund what property tax did. Or implementing a state-level “fair tax” consumption tax that could funnel to localities. Perhaps even a land value tax concept while eliminating improvements tax (so people not penalized for building/renovating). Many models to consider; the commission can gather input from economists, local gov, taxpayers. The goal: same or better funding for schools and local services but shift burden in a way that is less onerous.
​
4. We must consider fairness: sales tax hikes hit lower income more, but property tax hits asset-rich cash-poor like retirees badly. We might do mix – some sales, some income surcharges – but ensuring overall net tax doesn’t increase, ideally decrease, and distribution is fair.
​
5. Use Surpluses to Buy Down Levies: With TABOR surpluses expected, one idea: instead of refunding via checks, use some to directly reduce property tax bills (like state pays a portion for everyone). Prop HH attempted a small portion of that concept but was tied with other issues. We could do it more straightforwardly: if state has $X extra, distribute to counties proportionally to cut mills. It’s like a state rebate on property tax. Over time as economy grows, we could increase that to fully supplant local property tax. However, some may prefer refund directly. But many refunds came as flat checks anyway, which is fine. Using them to cut property tax specifically could help those with bigger property tax burdens.
6. Constitutional Amendment Long-term: Ultimately to eliminate, likely a constitutional measure needed that overhauls how local gov’t finances work and prohibits property tax beyond maybe a nominal amount. This is a heavy lift, but we can start building public support. Emphasize: you truly own your home outright and attract businesses (some avoid owning real property in high property tax places). People might fear for school funding stability; we show plan to have state guarantee it (with robust taxpayer protections still via TABOR). If elimination seems too far, aim to eliminate on primary residences and farmland first (like homestead full exemption), and keep moderate tax on investment/commercial property (because business often can deduct property tax as expense anyway). Although careful: if you exempt too much base, what remains (commercial) might revolt due to heavy share (like Gallagher did shifting burden to business).
​
7. Modernize Local Finance: Encourage localities to diversify revenue – modest local sales taxes or fees – as property tax shrinks. Possibly allow local income tax (but that’s tricky and currently disallowed for most I think, except Denver has occupational privilege tax) or more user fees for services. The notion: fund local needs in ways that correlate to usage or consumption rather than an asset tax that one must pay regardless of income flow.
​
8. Control Spending: Of course, underlying all, local governments must keep spending in check to make tax elimination feasible. We might propose further TABOR-like limits for local government spending, or easier voter-initiated reductions in mill levies. If spending grows unchecked, eliminating a revenue source gets harder. So, tie elimination plan with efficiency improvements (e.g., incentive for counties to share services or cut overhead, etc., in exchange for state assumption of funding responsibilities).
​
9. Interim Relief: While working on elimination blueprint, continue interim relief like this year’s special session likely will to soften increase shock (maybe raising exemption amounts or one-time credits). Always mindful to not simply shift burden unpredictably (we don’t want to inadvertently starve schools then be forced to raise other taxes hurriedly; must be strategic and planned).
​
d. Impact and Benefits: Removing property tax would be revolutionary. Homeownership becomes more attainable long-term; once mortgage done, costs drop significantly (just maintenance, no big tax). People less likely to lose homes in economic downturns due to tax delinquency. It especially helps low-income homeowners in gentrifying areas whose taxes skyrocketed. For farmers, no property tax could help them keep land and invest more in operations. Businesses would enjoy lower operating costs on facilities (balanced by any new sales tax maybe, but if structured right, could still net benefit or at least more growth oriented tax base). It would also constrain government: property tax is stable revenue they rely on – replacing with more economy-based taxes means government fortune rises and falls with private sector health, which is accountability (they have stake in strong economy then).
​
We have to ensure any shift is not regressive or punishing in other ways. Sales tax can be regressive; we could exempt groceries or essentials more (Colorado already doesn’t tax groceries at state level). Or use progressive income tax (but Colorado constitution mandates flat income tax; maybe if property tax gone, voters might accept graduated or surcharges for high earners to fund local stuff). These details need analysis.
We foresee broad popular appeal if we show how to maintain public services. People resent property tax especially when values inflate beyond their control – this plan addresses that pain at root. It’s a long road but every great reform starts with a bold vision, and we’re setting that vision: That one day, Coloradans can truly own their property outright, free from annual tax burdens. We’ll start making that a reality.